Adr Notes

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ADR- Notes
Alternative Dispute Resolution (University of Nairobi)
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ALTERNATIVE DISPUTE RESOLUTION-GPR 312
ALTERNATIVE DISPUTE RESOLUTION
GPR 312
TAUGHT BY: MR.LEONARD OLOO
FROM JANUARY 13TH 2014
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THESE NOTES HAVE BEEN COMPILED BY JOSEPH MCDONALD PHOTOCOPYING IS PROHIBITED

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LECTURE 1: 13TH JANUARY 2014- 5.30-7.30PM (LECTURE HALL B2)
TOPIC 1: INTRODUCTION TO ADR

In Kenya the use of ADR is supported by Article 159 (2) and (3) of the Constitution.
CHAPTER TEN-JUDICIARY
PART I- JUDICIAL AUTHORITY AND LEGAL SYSTEM
JUDICIAL AUTHORITY
159. (1) Judicial authority is derived from the people and vests in, and shall be exercised by, the courts and
tribunals established by or under this Constitution.
(2) In exercising judicial authority, the courts and tribunals shall be guided by the following principles—
(a) justice shall be done to all, irrespective of status;
(b) justice shall not be delayed;
(c) alternative forms of dispute resolution including reconciliation, mediation, arbitration and traditional dispute
resolution mechanisms shall be promoted, subject to clause (3);
(d) justice shall be administered without undue regard to procedural technicalities; and
(e) the purpose and principles of this Constitution shall be protected and promoted.
(3) Traditional dispute resolution mechanisms shall not be used in a way that—
(a) contravenes the Bill of Rights;
(b) is repugnant to justice and morality or results in outcomes that are repugnant to justice or morality; or
(c) is inconsistent with this Constitution or any written law.
Basically the Article stipulates the principles of the court and states that courts should
encourage the use of ADR including reconciliation, mediation, arbitration and traditional dispute
resolution mechanisms.
There is a caveat for the use of traditional dispute resolution mechanisms in that they should
not be repugnant to morality and justice and they should not be inconsistent with any other
written law. (See Section 3 of the Judicature Act).
Article 48 also places a constitutional burden to the state to ensure that access to justice is
available to all.
Access to Justice.
48. The State shall ensure access to justice for all persons and, if any fee is required, it shall be
reasonable and shall not impede access to justice.
See also Article 33 of the UN CHARTER which provides for a conflict management mechanisms.
Naturally /logically courts can not deal with all manners of disputes. They have been burdened
with litigation and we find that some issues which can be sorted by neighbors, churches, families
and business associations end up in courts.
THE WOOLF REPORT

This enquiry was headed by Lord Justice Woolf; it started deliberations in 1994 with an Interim
Report being published in 1995 and the final report in 1996.
The interim report proposed among other things encouraging the use of ADR.
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The final Woolf Report: Access to Justice published in 1996 extended the ideas of the interim
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report and set out key objectives which were:

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i. Parties to be encouraged to explore alternatives to a court resolution of a dispute.

ii. A single set of rules governing proceedings in the High Court and the County Court.
iii. A shorter timetable for cases to reach court and for lengths of trials.
iv. More affordable litigation.
ENCOURAGING ADR
Although the constitution makes ADR as one of the principles of justice administration and
courts should encourage the use of ADR; in recent past we have seen courts taking a tougher
stance.
See Mutinda vs. IEBC Exparte Patel [2013]eKLR
CASE 1
Mutinda vs. IEBC Exparte Patel [2013]eKLR
Justice Odunga said this about ADR “ Courts and Tribunals cannot be said to promote ADR mechanisms
when they readily entertain disputes that can be resolved in other legal forums”………Courts and
Tribunals shall be guided by the principles of ADR as stipulated in Article 159 (2) of the constitution.
Accordingly I agree that where there is an alternative remedy and procedure available for the resolution
of the dispute that remedy ought to be pursued and procedure adhered to”
See also the English case of R (Cowl and Others) vs. Plymouth City Council [2002] Vol 1 WLR
803
CASE 2
R (Cowl and Others) vs. Plymouth City Council [2002] Vol 1 WLR 803
The Court of Appeal held that judicial review proceedings about the closure of an old people’s home
should be allowed to go ahead if a significant part of the issues could be resolved by ADR.Lord Woolf
giving judgment said “The importance of this appeal is that it illustrates that even in disputes between
public authorities and members of the public for whom they are responsible sufficient attention is
paid to the paramount importance of avoiding litigation whenever that is possible”.
He further stated that if necessary the court might have hold on its own initiative an inter-parties
hearing in which the parties could explain what steps they had taken to resolve the dispute without
involvement of the court. This placed the lawyers on both sides under a heavy obligation to use ADR
unless it really proved impossible.
He said “Today sufficient should be known about ADR to make the failure to adopt particularly when
public money was involved indefensible”.
In industrial and labour matters one would be slapped with costs if they don’t avail themselves
to ADR.
See Njangi vs. Supkem [Industrial Court Case No.416 of 2011]
CASE 3
Njangi vs. Supkem [Industrial Court Case No.416 of 2011]
Justice L.Ndolo
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In this case one of the parties a religious body was wondering why the other party had rushed to court
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yet there were provisions to use ADR.

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See also the English Case of Dunnett vs. Railtrack Plc (In Administration) [2002] 2 ALL ER 850
CASE 4
Dunnett vs. Railtrack Plc (In Administration) [2002] 2 ALL ER 850
In this case the court applied cost penalties for a failure to use ADR.What had happened was that the
claimant had been granted leave to appeal ,but in giving leave the trial judge advised both parties that
they should consider the use of ADR.The defendant declined to mediate .On the hearing of the appeal
the claimants appeal was dismissed but the defendant was not awarded costs because of refusal to try
ADR.Brooke J said
“It is hoped that publicity will draw the attention of lawyers to their duties to further the overriding
objective….and to the responsibility that, if they turn down out of hand the chance of ADR when
suggested by the court as happened on this occasion they may face uncomfortable cost consequences”.
This case was the first time that a successful party was refused costs because they declined mediate.
Courts can also order stay of proceedings in contractual cases where mandatory ADR terms
have been provided.
See Cable & Wireless PLC vs. IBM United Kingdom Ltd [2002] EWHC 2059 (Comm)
CASE 5
Cable & Wireless PLC vs. IBM United Kingdom Ltd [2002] EWHC 2059 (Comm)
The judge held that contractual term providing for mandatory ADR in the event of a dispute was capable
of being enforced by a stay of proceeding. However this could only happen if there was sufficient
certainty as to what type of ADR procedure should be used. The court stressed the overriding objective
of the Civil Procedure Rules and also the encouragement of ADR in case management.
This vey hard line use of ADR was considered as going beyond “encouraging ADR”.
Indeed Khawar Qureshi in an article “Doors of the High Courts are opened by fewer and
fewer” The Times 27th April 2004 pointed out that it could violate Article 6 of the European
Convention on Human Rights-the right to fair trial.
The matter was considered further by the courts in the conjoined appeals of Halsey vs Milton
Keynes General NHS Trust and Steel vs Joy and Another [2004] EWCA Civ 576
CASE 6
Halsey vs Milton Keynes General NHS Trust and Steel vs Joy and Another [2004] EWCA Civ 576
In this case the Law Society was joined as an interested party and put forward arguments on the point of
when ADR should be used. The Court of Appeal stressed the distinction between encouraging mediation
strongly and ordering it and said that:”…to oblige truly unwilling parties to refer their disputes to
mediation would be to impose an unacceptable obstruction on their right to access to the courts”.
Lord Justice Lawton set out the relevant factors to be considered in the deciding whether to impose a
costs penalty for refusal to try ADR.He started by pointing out that an order to deprive a successful party
of some or all of his costs because that party had refused to agree to ADR was unsuccessful party to
show why there should be a departure from the general rule. Relevant factors to be considered in such
cases were:
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1. The Nature of the Dispute: Some cases were unsuitable for ADR ;these included cases where
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there was a point of law or interpretation in issue, claims involving fraud and cases where there

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was a claim for an injunction.

2. The Merits of the Case: Where a party reasonably believes that they have a watertight case
then they may be justified in refusing to use ADR.
3. Previous Attempts to Settle by Other Methods: Although parties should realize that mediation
often succeeded where other attempts to settle have failed.
4. The Cost of Mediation: This is particularly important where the amount being claimed is
relatively small.
5. Delay: If mediation was suggested late in the case and would have the effect of delaying the trial
then that was a good reason for refusing ADR.
6. Prospect of Success: Whether mediation had a reasonable prospect of success.
So the present position is that the court will continue to strongly encourage the use of ADR while
recognizing that there are circumstances in which refusal to attempt ADR is justified.
WHAT IS ADR
This is a range of dispute resolution mechanisms, process, and procedures for resolution of
disputes other than by litigation.
ADR is premised on the assumption that litigation is a primary method of resolving disputes in a
given legal system.
Some writers have suggested that the use of the term “alternative” demeans ADR and have
suggested the use of “appropriate”.
ADR can also be viewed as one of the many aspects of access to justice amongst others e.g. legal
aid and advise, representative suit, small claims, procedural changes etc in the broader scheme
of legal reforms within the legal system.
The rationale of using ADR is premised on Article 159 (2) of the Constitution.(See above).
ADR was brought about by the problems people faced with the court system.
Read the following articles to understand
a) Roscoe Pound –Causes of Popular Dissatisfaction With The Administration of Justice (1906)
Presented at the Annual Convention of the American Bar Association in 1906
b) Dickens Literature before the Judicature Act (Especially the Bleak House) –He has several
quotes about the English legal system.
Later on in the 1960-70 ADR was promoted by the then Dean of Havard School of Law and the
Head of the Supreme Court in the US.
One can also refer to the article by Derek C Bok “A flawed system of Law Practice and Training”
he seems to suggest that the legal training and hence practice is geared towards litigation.
The ADR movement caught on and spread to other countries especially through donor led legal
forums.
CRITICS OF ADR
There has been a strong critics of ADR based on Popularity vis-a-viz it’s Quality.
See the article by Owen Fiss “Against Settlement” 93 YALE 1073 (1984) for the full analysis.
But the following are some of the arguments against ADR
1. It promoted settlement at the expense of justice.
2. ADR could replace the rule of law with other non-legal values.
3. ADR can lead to an emergence of second class justice where new rights can not
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emerge.(For example without litigation in court there would be no Ryland vs. Fletcher

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or Stevenson vs. Donohue which brought about the torts of trespass and negligence
respectively).
4. Some critics have concerns about the legitimacy of ADR outcomes, charging that ADR
provides "second-class justice." It is argued that people who cannot afford to go to court
are those most likely to use ADR procedures. As a result, these people are less likely to
truly "win" a case because of the cooperative nature of ADR.
5. Similarly, critics believe that ADR encourages compromise. Compromise can be a good
way to settle some disputes, but it is not appropriate for others. In serious justice
conflicts and cases of intolerable moral difference, compromise is simply not an option
because the issues mean too much to the disputants.
6. Another concern is that ADR settlements are private and are not in the public record or
exposed to public scrutiny. This could be cause for concern in some cases. For example,
using ADR to settle out of court could allow a company to resolve many instances of a
defective product harming consumers, without the issue getting any public exposure.
On the other hand, a court ruling could force the company to fix all problems associated
with the bad product or even to remove it from the market.
7. Seemingly lack of an Appeal process in ADR
Therefore based on the above criticism some of the enthusiasms about ADR is more cautious
and one can say that ADR is not appropriate where
1. There is an interpretation of the law required
2. Where the litigant wants public vindication
3. Where the case is precedent setting
4. Where there is articulation of civil and constitutional rights.
WHY THE NEED FOR ADR

Conflict is as old as the human society.
There are several ways in which one would deal with conflict e.g. domination, cover-up,
compromise and integration (accommodate each parties desires).
Conflict is a wide generic term while a dispute is a class of the conflict which manifests itself as
distinct justiciable issue.
As lawyers we have to be careful not to rush to court to settle dispute at the expense of the
wide conflict resolution.(E.g. you might rush to take to court some one only to realize that they
give you 50% of the business).
As a result it is important to talk of conflict resolution as opposed to dispute settlement.
Why do people go to court? Considering that access to justice is a path with many barriers e.g
a) Naming the item-That is to say that a particular item is injurious
b) Blaming-Identify the grievance and identify who is responsible.
c) Claiming- Confronting the wrong doer.
d) Response –Of the wrong doer.
If a litigant has gone through the above process (steps) and feel that they can not ignore the
matter.
The litigant has evaluated the economic cost and the cost in terms of time and actual cost and is
willing to expend it.
It is the very nature of the court system that one is bound to face challenges (Jeremy Bentham)
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CHARACTERISTICS OF COURT SYSTEM

1. It is costly
2. Laced with formal and procedural technicalities
3. It is technical in nature hence the need of litigants to be presented.
4. It is a multi-layer system ( Trial or Hearing, Appeal and Counter Appeals)
5. It is a public forum
6. It is adversarial in nature
7. It has inherent delays
8. It is a win or lose situation no win-win
9. It has clear enforcement mechanisms
10. Court system is alien to Africans- (Customary was simple, speedy, fair and relevant to the needs
of the community).The African system did not revolve around battle but rather aimed at
resolving conflicts.
ADVANTAGES OF COURT SYSTEM
1. Precedent: The doctrine of judicial precedent will be applied by the judge, which leads to a
reasoned decision.
2. Qualification: A legally qualified judge will decide the case.

3. Hierachy: There is an appeal system if a party is unhappy with the decision of the trial judge.
4. Legal Aid: is available for those on a low income.
5. Enforceability: It is easier to enforce a court decree.
6. Public: Leads to vindication
7. New Rights: It leads to the development and recognition of new rights.
8. Deterrence: It might lead to deterrence due to its public nature.
DISADVANTAGES OF THE COURT SYSTEM
1. The civil courts are expensive. Many cases cost more than is being claimed.
2. There are delays in waiting for the trial, adjournments and to file appeals etc The delay can also
be due to backlog of cases.
3. The procedures are complex, which requires the litigants to be represented
4. The courts are open to the public and press, which could lead to adverse publicity.(Absence of
privacy)
5. The judge will not have technical expertise.e.g construction, pharmaceutical or oil and gas
6. The court service chooses the trial date.
7. Courts can be intimidating and make the litigants fumble even where they are right.
8. Courts are sometimes inaccessible e.g. in the Kenyan context there are places where there is
only one court serving a vast area or population.
9. Courts can be influenced or corruptible
10. In courts one get technical justice instead of substantive justice.
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ADVANTAGES OF ADR
ADR can be used to supplement the court system and hence has the following advantages
a) Reduces backlog
b) Reduces cost
c) Reduce formality and complexity
d) Increases satisfaction of the parties
e) Allow for inclusion of expertise
f) By pass courts especially if they are discredited.
See the case of Republic v. Mohamed Abdow Mohamed Criminal Case 86 of 2011
CASE 7
Republic v. Mohamed Abdow Mohamed Criminal Case 86 of 2011
The accused was charged with murder but pleaded not guilty. On the hearing date the court was
informed that the family of the deceased had written the Director of Public Prosecutions (DPP)
requesting to have the murder charge withdrawn on account of a settlement reached between the
families of the accused and the deceased respectively. Subsequently, counsel for the State on behalf of
the DPP made an oral application to have the matter marked as settled, contending that the parties had
submitted themselves to traditional and Islamic laws which provide as avenue for reconciliation. He
cited Article 159 (1) of the Constitution which allowed the courts and tribunals to be guided by
alternative dispute resolution including reconciliation, mediation, arbitration and traditional dispute
Excerpt of the letter from the deceased family to the DPP:
“…The two families have sat and some form of compensation has taken place wherein camels, goats and
other traditional ornaments were paid to the aggrieved family. Actually one of the rituals that have been
performed is said to have paid for blood of the deceased to his family as provided for under the Islamic
Law and customs. These two families have performed the said rituals, the family of the deceased is
satisfied that the offence committed has been fully compensated to them under the Islamic Laws and
Customs applicable in such matters and in the foregoing circumstances, they do not wish to pursue the
matter any further be it in court or any other forum… it’s worth noting that it goes against our tradition
to pursue the matter any further and/or testify against the accused person once we have received full
compensation in the matter of which we already have… It’s our instruction that the matter and/or court
case be withdrawn as our family wishes to put a stop to the matter.”
Issues
i. Whether a murder charge can be withdrawn on account of a settlement reached between the
families of an accused and the deceased.
ii. Whether alternative dispute resolution mechanisms as espoused by the Constitution of Kenya,
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2010 extended to criminal matters.

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Criminal Law - murder - accused charged with offence of murder - application seeking to have the matter
marked as settled - whether a murder charge can be withdrawn on account of a settlement reached
between the families of an accused and the deceased - whether alternative dispute resolution
mechanisms as espoused by the Constitution of Kenya, 2010 extended to criminal matters - Constitution
of Kenya, 2010, article 159(1).
Held:
1. Under article 157 of the Constitution of Kenya, 2010, the Director of Public Prosecutions is
mandated to exercise state powers of prosecution and may discontinue at any stage criminal
proceedings against any person.
2. The ends of justice would be met by allowing rather than disallowing the application.
Application allowed, accused person discharged.
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LECTURE 2 AND 3: 20TH JANUARY 2014- 5.30-7.30PM (LECTURE HALL B2)
TOPIC 2: NEGOTIATIONS
Negotiation is a process of communicating back and forth for the purpose of reaching a joint
decision when you and the other side have some interests that are shared and others that are
opposed.
Negotiation is a basic means of getting what you want from others.
Back and forth communication designed to reach agreement when you and the other side have
some shared and some opposed interests.
Negotiation is not easy to do well.
Standard strategies often leave people dissatisfied, worn out or alienated.
Dilemma: people see two ways to negotiate – Soft and Hard.
Soft: avoid conflict; make concessions; often end up exploited and feeling bitter.
Hard: sees any situation as a contest of wills. Exhausts people and resources and harms
relationships.
Other strategies are between hard and soft, but each involves a trade off.
Third way to negotiate: both hard and soft.
Principled Negotiation: decide issues on their merits instead of haggling.
Look for mutual gains wherever possible.
Where interests conflict, insist that results be based on some fair and independent standards.
Any method of negotiation may be fairly judged by three criteria:
a) Does it produce a wise agreement?
b) Is it efficient?
c) Does it improve or at least not damage the relationship between the parties?
A wise agreement:
a) Meets legitimate interests of each side to the extent possible
b) Resolves conflicting interests fairly
c) Is durable
d) Takes community interests into account
DIFFERENCE BETWEEN THE STYLES OF NEGOTIATION
SOFT HARD PRINCIPLED

1. Participants are friends. 1. Participant as adversaries. 1. Decide issues on their
2. Goal is agreement 2. The goal is victory. merits.
3. Make concessions to 3. Demand concessions as a 2. Look for mutual gains.
maintain relationship. condition of relationship. 3. Where interests conflict,
4. Be soft on the people 4. Be hard on the problem use fair standards to obtain
and the problem. and the people. a result.
5. Trust others. 5. Distrust others. 4. Can be used whether there
6. Change your position 6. Dig in to your position. is one issue or several.
easily. 7. Make threats. 5. Two parties or many.
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7. Make offers. 8. Mislead as to your bottom 6. Useful in prescribed or

8. Disclose your bottom line. impromptu negotiations
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line. 9. Demand one-sided gains

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9. Accept one-sided losses as the price of agreement.

to reach agreement. 10. The single answer: the
10. The single answer: the one you will accept.
one they will accept. 11. Insist on your position.
11. Insist on agreement. 12. Try to win a contest of
12. Try to avoid a contest wills.
of wills. 13. Apply pressure.
13. Yield to pressure.
POSITIONAL BARGAINING
Most negotiation depends on taking and then giving up a sequence of positions.

Taking positions tells the other side what you want, serves as an anchor and will produce
acceptable agreements.
But often fails to meet basic criteria of a wise agreement reached efficiently and amicably.
1. Arguing over positions produces unwise agreements

negotiators lock themselves into positions which they must defend against attacks
the more you defend, the harder it is to change a position
position now involves ego and saving face
less and less likely an agreement will wisely reconcile original interests
2. Arguing over positions is inefficient

This process takes a lot of time.
You must start with an extreme position and stubbornly hold to it.
Make only small concessions as necessary to keep negotiations going.
Require many decisions by each side about what to offer and reject.
3. Arguing over positions endangers an ongoing relationship

strains and sometimes shatters relationships
long time commercial enterprise partners may part company
neighbours may stop speaking to each other
especially tragic in divorce/child custody situations
4. Being nice is no answer

In soft negotiations, make offers and concessions, be friendly, yield as necessary to
avoid conflict (e.g. WWII)
Between friends and family, it tends to be efficient as it produces results quickly
But it does not ensure a wise agreement
For example, story about the combs and the watch by O. Henry
PRINCIPLED NEGOTIATIONS
Characteristics:
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a) Decide issues on their merits.

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b) Look for mutual gains.

c) Where interests conflict, use fair standards to obtain a result.

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d) Can be used whether there is one issue or several.

e) Two parties or many.
f) Useful in prescribed or impromptu negotiations
It has Four Basic Points
Emotions cloud the objective merits of the problem

Egos become identified with positions
Participants should come to see themselves as working side by side
Focus on interests, not positions

Object is to satisfy underlying interests
A position may obscure what you really want
Compromising is not likely to address underlying interests
Example: two men quarrelling in a library about the window.
Example: talks on nuclear testing breakdown over number of inspections
Having a lot at stake and searching for the one right solution inhibits creativity
Create an opportunity to think up a wide range of solutions that advance shared
interests and creatively reconcile differing interest’s example: argument over an orange.
For example, market value, expert opinion, custom, precedence or law

Both parties can defer to a fair solution without giving in to each other
Fair standards (There is often more than one objective criterion available).
Car example:
a) Original cost less depreciation
b) What the car would have sold for
c) Blue book value
d) Replacement cost
e) What a court might award as the value.
Principled Negotiation occurs in Three Stages:

a. Analysis Stage: diagnose the situation.
b. Planning Stage: generate ideas and decide strategy.
c. Discussion Stage: communication back and forth.
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1. DEALING WITH THE PEOPLE’S PROBLEM (SEPARATE THE PEOPLE FROM THE PROBLEM)
Negotiators are people first i.e. they have certain interests

The different types of interests are
i. Substance
ii. Relationship
Relationship tends to become entangled with problems
Positive bargaining puts relationships and substance in conflict
A negotiator wants to reach an agreement that:
a) Satisfies his/her substantive interests; and
b) Preserves/fosters valued relationships.
c) Most negotiations take place in the context of an ongoing relationship.
In some cases the ongoing relationship may be more important than the outcome of any
particular negotiation (e.g. family).
We tend to treat the people and the problem as one in the same.
Egos become involved in substantive positions.
People often draw unfounded inferences from comments on substance.
Deals with people problems directly; don’t try to solve them with substantive concessions.
Base the relationship on:
a) Accurate perceptions,
b) Clear communication
c) Appropriate emotions
d) A forward-looking outlook
Separate the relationship from the substance; deal directly with the people problem
TYPES OF PEOPLE’S PROBLEMS
a) Perception
Both parties may agree as to the facts but disagree on the preferred outcome.
We need to be able to see the situation as the other side sees it.
Understanding their point of view is not the same as agreeing with it.
You may however modify your own views as a result
Don’t
i. Blame; even if blaming is justified, it is usually counterproductive.
ii. Don’t deduce their intentions from your fears. Tendency to put the worst interpretation
on what the other side says or does.
iii. Don’t treat as unimportant those concerns of the other side that you perceive as not
standing in the way of an agreement.
Do
i. Discuss each other’s perceptions.
ii. Look for opportunities to act inconsistently with their preconceptions.
iii. Involve the other side in the process of reaching an outcome. Agreement is much easier
if both sides feel ownership of the ideas/solutions.
iv. Involve the other side(s) early.
v. Allow all parties to save-face. A potentially acceptable solution may be rejected if a
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party is forced to lose face in the process.

vi. Face-saving reflects a person’s need to reconcile the stand he or she takes in a
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Tactics To Deal With Perceptions

Put yourself in others shoes
Don’t deduce their intentions from your fears
Don’t blame them for your problem
Discuss each others’ perceptions
Look for opportunities to act inconsistently with perceptions
Make other party participate in the process.
Proposals and values should be consistent
b) Emotions
Emotions often run high from the start.

Emotions can create an impasse.
Recognize your emotions and those of the other side.
Don’t
i. Don’t treat negotiators who represent organizations as mouthpieces without emotions.
ii. Don’t react to emotional outbursts.
iii. Don’t stop people from expressing their emotions or dismiss their emotions.
Do
i. Make emotions explicit and acknowledge them as legitimate. Recognize theirs and
yours.
ii. Continue listening when the other side is letting off steam.
iii. Interact with the other side away from the bargaining table (e.g. dinner).
iv. Make an apology if it is warranted.
Tactics To Deal With Emotions

Understand yours and others emotions
Make emotions explicit and acknowledge them as legitimate
Allow other side to let off steam
Don’t react to emotional outbursts
Use symbolic gestures
c) Communication
Potential problems:
i. Negotiators may not be talking to one another but to other parties. Playing to the
gallery.
ii. Negotiators are not really listening to the other side. Thinking about their next
argument.
iii. The other side misinterprets the communication (e.g. language - the word “average”).
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Do
i. Engage in active listening. Demonstrate that you have been listening - positive
paraphrasing. Understanding is not agreeing.
ii. Think before you speak.
Don’t
i. Blame the other side for the problem; name-call; or raise your voice.
ii. Allow poor body language
Communicational Issues
i. Confidentiality (the press, third parties, constituents).
ii. Size of group meetings.
iii. Communication away from the table.
iv. Ability of negotiator to make decisions on behalf of their constituents.
Tactics To Deal With Communication

Listen actively and acknowledge what is being said
Speak to be understood
Speak about yourself, not about them
Speak for a purpose
Relationships
i. Negotiations are about relationships.
ii. A working relationship can be very beneficial - less chance for miscommunication; more
openness; more trust.
iii. Hard to separate the relationship from the substantive problem.
iv. Side-by-side joint problem solving.
Tactics To Deal With Relationships

Prevention works best
Build a working relationship
Face the problem, not the people
2. FOCUSSING ON INTERESTS
Many impasses are due to our tendency to think about our positions not our interests.
Interests - each side’s needs desires, concerns and fears.
Our interests underpin our positions.
INTERESTS
In a negotiation the interests of the respective parties may be:

a) the same (i.e. shared);
b) different but compatible (e.g. Ugly oranges); or
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c) Irreconcilable.
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Examining each side’s interests instead of their positions can make solutions easier to find.
For every interest there usually exist several possible options that could satisfy it.
Shared and compatible interests may lie behind opposing positions.
Differing but complimentary interests can also form the basis for a mutually acceptable
agreement.
The interests underlying a person’s position are often not clear. They may be unexpressed or
inconsistent with their clearly stated position.
Try to discover the underlying interests of the other side.
In most negotiations, each side will have multiple interests, not just one.
Every negotiator has a constituency to whose interests he/she is sensitive. It may be a
constituency of one (e.g. themselves) or of many (e.g. an organization or coalition).
Within a constituency there may exist a variety of interests.
The most powerful interests are basic human needs:
a) Security
b) economic well-being
c) a sense of belonging
d) recognition
e) control over one’s life
Make your interests clear. Don’t let them get lost in the rhetoric. Be specific.
“If you want the other side to appreciate your interests, begin by demonstrating that you
appreciate theirs.”
Paraphrase their interests. Active listening. Legitimizing.
Encourage them to listen to you by: Stating your interests and reasoning first and your
conclusions/proposals later.
Shared interests:
a) May not be immediately obvious;
b) Are opportunities to build upon; and
c) Can make negotiations smoother and more amicable (“in it together”).
Differences (e.g. interests, beliefs, valued items) can lead to agreements.
Dovetailing - looking for items of low cost to you but high benefit for them, and vice versa.
Focus on where you are going, rather than arguing about the past.
Try to bring to the negotiation several options that could meet your interests.
While pressing your substantive issues, keep an open mind to modifying your list of options.
Tactics To Deal With Interests
Focus on Interests, Not Positions

To create creative and wise solutions
Interests are the desires and concerns that drive positions
Interests define the problem
How do you identify interests?

Put yourself in their shoes!
Ask Why? Ask Why not?
Realize each side has multiple interests
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Basic human needs are most powerful interests

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Make a List

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Talking about interests

Make your interests come alive
Acknowledge their interests
Put the problem before your answer
Be hard on problem/soft on people
3. GENERATING OPTIONS
Successful negotiators invent options for mutual gain.
Obstacles that inhibit the inventing of multiple options
a) Premature judgment;
b) Searching for the single answer;
c) The assumption of a fixed pie; and
d) Thinking that “solving their problem is their problem”.
Inventing options does not come naturally. Not inventing is the normal state of affairs.
Sometimes we fear that by inventing options we will disclose some piece of information that will
jeopardize our bargaining position.
Negotiations often appear to be “fixed-sum” games (e.g. buying a car: $100 more for you,
means $100 less for me).
Ask yourself whether your proposed solution meets the self-interest of all parties.
We are too often unwilling to help the other party (ies) find solutions that meet their needs (e.g.
history of bad blood).
To invent creative options
a) Separate the act of inventing options from the act of judging them.
b) Broaden the options on the table rather than look for a single answer.
c) Search for mutual gains.
d) Invent ways of making their decision easy.
Try to think laterally to generate more options that might lead to a solution(s):
a) Small group activities (build on each others ideas).
b) Use a third party to help you overcome the tendency for “groupthink”.
c) Generate variations on your original set of options.
d) Don’t throw away “flawed” options too quickly. They might provide the seed for a good
idea/option.
e) Create an environment conducive to this task.
The above could be done by each party (among themselves) or between the negotiating parties.
Examine your problem from the perspective of different professions and disciplines.
If you cannot agree on substance, you may be able to agree on procedure.
At a minimum agree on where you disagree.
A perfect “win-win” solution may not be possible at the time of the negotiation.
Negotiations sometimes result in provisional or contingent agreements or partial solutions.
Remember: the context of most negotiations is dynamic and will continue to be so after the
negotiation.
Can the subject matter be enlarged so as to “sweeten the pot”?
Successful partial solutions can form the basis for more comprehensive solutions later.
Make it easy for the other side to accept your solution.
Are there useful precedents to draw upon?
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Tactics For Inventing Options For Mutual Gain
Is there a fair way to split the pie?

Leaving money on the table
Four Major Obstacles

Premature Judgment
Searching for the single answer
Assumption of a fixed pie
Thinking that “solving their problem is their problem”
a)Premature Judgment
Problem: Deciding too quickly
Solution: Separate Inventing from Deciding and Brainstorming with the other side
b)Searching For a Single Answer

Problem: Allows little room to negotiate
Solution: Come up with alternatives and The Circle Chart
c) Assumption of a Fixed Pie
Problem: Mind-set of ‘either I win or you win’

Solution: Look for Shared Interests; In every negotiation Opportunities Makes things
smoother
d) Solving Their Problem is Their Problem

Problem: ‘We have enough problems on our own, they can look after themselves’
Solution: Put Yourself in their shoes; Makes their decision easier
e) Finally
Focus on the problem not the people

Concentrate on the interest of both parties
Develop alternatives for mutual gain
4. OBJECTIVE CRITERIA
Insist on using objective criteria.

Sometimes, despite your best efforts, interests will conflict.
The temptation is to resort to positional bargaining in such cases.
The alternative is to make a decision on the basis of objective criteria.
The more you bring standards of fairness, efficiency, or scientific merit to bear on your problem,
the more likely is a final outcome that is wise, fair and stable.
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Example, the Law of the Sea conference: MIT model for the economics of deep-seabed mining.
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HOW TO DEVELOP OBJECTIVE CRITERIA

Plan in advance.
Typically more than one objective criterion is available. Example: car insurance claim. What is
the car’s value?
Are the criteria legitimate and practical?
Examples of types of objective criteria
i. Market value
ii. Precedent
iii. Scientific judgment
iv. Professional standards
v. Efficiency
vi. What a court would decide
vii. Moral standards
viii. Tradition
To produce an outcome independent of will, you can use either fair standards for the
substantive question or fair procedures for resolving the conflict.
NEGOTIATING WITH AN OBJECTIVE CRITERIA

Frame each issue as a joint search for objective criteria.
Reason and be open to reason as to which standards are most appropriate and how they should
be applied.
Never yield to pressure, only to principle.
“It’s a matter of principle”.
“It’s company policy”.
A principled negotiator is open to reasoned persuasion on the merits.
BEST ALTERNATIVE TO A NEGOGIATED AGREEMENT (BATNA)
What are the costs and benefits associated with having a “bottom line”?
What is the difference between a “bottom line’ and your BATNA? Example: selling your home.
Why should we know our BATNA?
Your BATNA is the standard against which any proposed agreement should be measured.
Negotiating without determining your BATNA is negotiating with your eyes closed.
Too optimistic or too desperate.
Trip wires – provides you with some margin in reserve.
The better your BATNA, the greater your power.
How attractive to each party is the option of not reaching agreement?
Power balance.
Develop Your BATNA

i. Invent a list of actions you might take if no agreement is reached;
ii. Improve some of the more promising ideas and convert them into practical alternatives;
and
iii. Select, tentatively, the one alternative that seems best.
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Importance of having a BATNA

i. Knowing your BATNA gives you additional confidence in the negotiating process.
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ii. It is easier to break off negotiations if you know where you are going should the
negotiation fail
Should you reveal your BATNA to the other side?
Consider the other side’s BATNA
If both sides have attractive BATNAs, the best outcome of the negotiation, for both parties, may
well be not to reach agreement.
SOURCES OF NEGOTIATING POWER
There is power in:

i. Developing a good working relationship with the other party
ii. Understanding interests
iii. Inventing an elegant option. (e.g. stamp auction rule – highest bidder gets the stamps at
price of second highest bid)
iv. Using external standards of legitimacy
v. Developing a good BATNA
vi. Make the most of your potential power-“Let us never negotiate out of fear but let us
never fear to negotiate”-J.F.Kennedy
ACTIVE LISTENING
Listening is perhaps the most qualities a negotiator needs.
A negotiator should show a genuine interest in the area of interest of the other side.
You should understand their positions, issues, hidden agendas, demands and priorities.
People like to be listened to and a good negotiator acknowledges this fact.
One way of showing that one is a good listener is by clarifying issues.
Most people however listen in order to reply (rather than listen to appreciate).
It is also important to compare cultures in some cultures speaking while someone else is
speaking is a great turn-off and sign of disrespect and can be a deal breaker.
Analysis has been done that communication is 7% words, 38% Voice and 55% body language. It
is important for the negotiator and his team not to give away to much in terms of voice and
body language.
Effective listening increases trust, lowers tension. The opponents will view you as trustworthy
and adding value to the relationship.
Another thing while negotiating is to avoid stereotyping (generalization).This is because
stereotypes distort perceptions and stalls negotiations. One tends to block any information
inconsistent with the stereotype (See the readings on 8 steps to genocide).
While talking; talk clearly and precisely.
Phrase sentences correctly.
Explain where you are coming from.
Reframe positions as interests (Letting them know that they have been understood).
Understand perceptions
Ask open questions (True for mediators and negotiators)
You need to know where the questions are going and the nature of information you are seeking.
As stated earlier separate the people from the problem.
Avoid the psychological problems e.g. I must win or interpreting other people’s concessions as
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weakness or trickiness.
When you are in an unconstructive course don’t escalate the issue…retract and focus on the
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Time orientation of the other party is important. There are two types
I. Monochronomic People-They think in a linear fashion, sequentially and focus on one
thing at a time, mostly associated with people from Europe, US, Japanese and Germans.
Normally they would start and end on time, they will schedule break times. One agenda
at a time and prefer to talk in sequence and view lateness as devaluing and lack of
respect.
II. Polychronomic People-Time is elastic and more important than schedule..Mostly
associated with Mediterranean and Latin Cultures/France/Some Eastern and African
Countries. Starting and ending of meetings is flexible, take brakes when appropriate.
Expected to read each other mind. And lateness is not taken personal.
TACTICS OF NEGOTIATING
THE ONE-TEXT PROCEDURE

A mediator asks about interests instead of positions. Asks “why?”
First, she tries to learn all she can about the needs and interests.
Explores the possibility that he might be able to make a recommendation.
Involves preparing drafts and asking for criticisms.
Problem: Positional Bargaining: Which Game Should You Play?
Solution: Change the Game – Negotiate the Merits
Soft: Participants are friends
Hard: Participants are adversaries.
Principled: Participants are problem solvers.
i. The goal is agreement.
ii. The goal is victory.
iii. The goal is a wise outcome reached efficiently and amicably
Make concessions to cultivate the relationship.

Demand concessions as a condition of the relationship.
Separate the people from the problem.
Be soft on the people and the problem.
Be hard on the people and the problem.
Be soft on the people, hard on the problem.
Trust others.
Distrust others.
Proceed independent of trust.
Change your position easily.
Dig in to your position.
Focus on interests, not positions.
Make offers.
Make threats.
Explore interests
Disclose your bottom line.
Mislead as to your bottom line.
Avoid having a bottom line
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Accept one-sided losses to reach agreement.

Demand one-sided gains as the price of agreement.
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Search for the single answer: the one they will accept.
Search for the single answer: the one you will accept.
Develop multiple options to choose from; decide later.
Insist on agreement.
Insist on your position.
Insist on using objective criteria.
Try to avoid a contest of will.
Try to win a contest of will.
Try to reach a result based on standards independent of will.
Yield to pressure.
Apply pressure.
Reason and be open to reason; yield to principle, not pressure.
It is important to recognizing the tactics the opponent is employing
i. Watch out for feigning of anger, aggressive behavior and threats
ii. Raising the stake and interagency towards the other party demand they make more
concession.
iii. One makes an offer, demands one but makes no concession (Boulwareism).This tactic is
good for narrow groups.
iv. False demands
v. Seduction (Presenting other peoples interest as your interest).
vi. Suggesting to the other party it is in their best interest to give in.
vii. Accommodation (Postponing delicate matters until later).
viii. Successive offers and counter offers.
ix. Exploiting interpersonal relationships e.g. friendships, difference in status, mutual
esteem or habits of working together.
x. Agreed setting where the negotiations will take place.
xi. Be the expert of facts and issues in the room.
NEGOTIATIONS AND ETHICS

How much information and when do we reveal?
It is sometimes okay to mislead and hold back some information.
Negotiation is like dividing a pie it can be viewed as
a) Fixed (Zero sum game)
b) Growing (Non Zero Sum game)
None zero sum is good because it is a positive sum negotiations and integrative where both
parties seek to expand the pie.
Value addition only happens when there is full, open and trustful exchange.
Lawyers need to be able to dig information for their clients in order to increase the pie if it’s
possible.
There are certain legal issues that may arise e.g. making untrue statements especially in
contracts of utmost good faith.
See the statutes e.g. Competition and Consumer Protection. See in particular Section 56 and 57
of the competition Act.
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LECTURE 4: 3RD FEBRUARY 2014- 5.30-7.30PM (LECTURE HALL B2)
TOPIC 3: MEDIATIONS
Mediation may be defined as including all types of dispute settlement in which parties are
assisted by a person external to the conflict (Mediator).
He can not make binding decisions for the parties but assist in various ways.
It may be contrasted with forms of decision making where the party makes a binding decision
e.g. Arbitration.
Mediation can be viewed as negotiation with a third party brought in i.e. as some kind of
facilitative negotiation.
It is a process where an impartial third party called mediator facilitates the negotiation process.
Section 2 of the Civil Procedure Act (Cap 21) defines mediation as an informal non adversarial
process where an impartial mediator encourages and facilitate the resolution of a dispute
between two or more parties but does not include attempts made by a judge to settle a dispute
within the course of judicial proceedings related thereto.
While a mediator is defined as an impartial third party selected to carry out mediation.
Mediation is not evidentiary unlike litigation or arbitration that are evidentiary processes.
There is nothing binding decision by a mediator.
Mediation can take many forms to suit specific circumstances e.g. it can be facilitative vs.
evaluative or mediation vs. conciliation.
It can be modeled to fit specific needs of the parties.
According to the Law Society in England mediation may contain certain elements
i. One or two parties to the dispute
ii. Need not be legally represented.
iii. It may take place at any time whether or not there is a legal process.
iv. The parties agree to appoint a neutral third party i.e. a mediator.
v. The third party is neutral (impartial).
vi. The mediator has no authority to make decisions as regard to the issues.
vii. It would relate to any or all of the parties.
viii. It can be civil or commercial matter (Can one have mediation on Human Rights or
Constitutional Issue).
ix. The neutral third party helps the parties to reach a decision.
x. The decision is arrived by negotiation and without adjudication.
CHARACTERISTICS OF MEDIATION
1. The parties agree to work with a facilitator or mediator to resolve a dispute.
2. A mediator does not make a ruling like a judge or arbitrator.
3. Mediation is voluntary so either party may choose to stop at any time.
4. The mediator is impartial and does not represent either party’s interest.
5. A mediator may meet with both parties, a joint session or individually with one party, a caucus.
When meeting in caucus, what is said to the mediator is confidential unless the party agrees
that the information can be shared.
6. A mediator can be used when direct negotiations failed.
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7. A mediator can be used when the parties don’t like each other.
8. A mediator may be able to diffuse conflicts or disagreements between the parties.
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10. Mediation is not therapy.

11. If the case cannot be resolved through mediation the parties may try arbitration.
Mediation appears to work best where the parties are willing to take part and the difficult part is
normally to bring the parties to the negotiation table.(Compare this with compulsory
mediation).
Mediation works best where
a) You have honest people
b) Parties are co-operative
c) Parties are interested in a continuing relationship
d) Where the parties feel safe
Mediation does not work well where
a) Where the matter is urgent
b) Where the parties feel coerced
c) Where there is threat of physical violence
d) In a Human Rights or Constitutional issue
e) Or where there is a vexatious litigant
OUTLINES OF DIFFERENT FIELDS OF MEDIATION ACTIVITY

Mediation can take place in any environment whether between sovereign states or even in s
school play ground.
But the following fields have used mediation (The fields are not limiting)
i. Civil Issues
ii. Commercial Issues
iii. Family Issues (Separation and Divorce).
iv. Work place and Employment Issues
v. Community and Neighbor Issues
vi. Restorative Justice (Victim Offender mediation and reparation)
vii. Online Dispute resolution (e-commerce or matters arising from usage of internet)
viii. Environmental and public policy issues
Each field has its own culture and practice in dealing with the dispute in the traditional way and
these differences have at least to some extent been imported to mediation though general
mediation principles will overlap all fields of activity.
DIFFERENCE BETWEEN MEDIATION AND NEGOTIATION
MEDIATION NEGOTIATION
The parties agree to work with a mediator to The parties agree to work with each other to
resolve a dispute resolve a dispute
A mediator may meet with both parties jointly or The parties always meet with each other
meet individually with one party which is called a
caucus
The mediator has no decision making authority The parties can bind themselves in an agreement.
and cannot bind the parties. A mediator does not
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make a ruling like a judge or arbitrator.

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reality check to the parties but it is not the agree with them.
mediator ‘s role to persuade the parties.
A mediator may be used because the parties Some negotiations fails because the parties wont
prefer a third party talk to each other
A mediator may be able to defuse conflicts or Some negotiations fail because the parties have
disagreements too many conflicts
Mediation is voluntary and either party may Some negotiations are not voluntary such as union
choose to stop at any time. negotiations
When negotiations reach an impasse the parties When the parties can’t agree they reach a
may try Mediation and when Mediation fails they deadlock or impasse
may try arbitration.
ALLEN GICHUI ARTICLE
COURT ANNEXED MEDIATION
Court Annexed Mediation is captured in Section 59 A-D of the Civil Procedure Act Cap 21.
Section 59 A-Mediation accreditation committee to be appointed by the CJ.See the composition
and functions of the accreditation committee.
Section 59 B- Mediation conducted under mediation rules after conclusion they will be recorded
or registered by the court and shall be enforceable (No appeal shall lie against this agreement)
Section 59 D- Enforcement (Agreement in Writing)
Rules Committee provided with the mandate to provide the rules of mediation.
SECTION 59 OF CAP 21
Part VI—Special Proceedings

Arbitration
Arbitration.
59. All references to arbitration by an order in a suit, and all proceedings thereunder, shall be governed
in such manner as may be prescribed by rules.
Establishment of Mediation Accreditation Committee.
59A.
1. There shall be a Mediation Accreditation Committee which shall be appointed by the Chief
Justice.
2. The Mediation Accreditation Committee shall consist of—
a) the chairman of the Rules Committee;
b) one member nominated by the Attorney-General;
c) two members nominated by the Law Society of Kenya; and
d) eight other members nominated by the following bodies respectively—
i. the Chartered Institute of Arbitrators (Kenya Branch);
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ii. the Kenya Private Sector Alliance;

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iv. the Institute of Certified Public Accountants of Kenya;

v. the Institute of Certified Public Secretaries;
vi. the Kenya Bankers’ Association;
vii. the Federation of Kenya Employers, and
viii. the Central Organisation of Trade Unions.
3. The Chief Justice shall designate a suitable person to be the Mediation Registrar, who shall be
responsible for the administration of the affairs of the Committee under this Act.
4. The functions of the Mediation Accreditation Committee shall be to—
a) Determine the criteria for the certification of mediators;
b) Propose rules for the certification of mediators;
c) Maintain a register of qualified mediators;
d) Enforce such code of ethics for mediators as may be prescribed; and
e) Set up appropriate training programmes for mediators.
Reference of cases to mediation.

59B.
1. The Court may—
a) on the request of the parties concerned;
b) where it deems it appropriate to do so, or
c) where the law so requires, direct that any dispute presented before it be referred to
mediation.
2. Where a dispute is referred to mediation under subsection (1), the parties thereto shall select
for that purpose a mediator whose name appears in the mediation register maintained by the
Mediation Accreditation Committee.
3. A mediation under this Part shall be conducted in accordance with the mediation rules.
4. An agreement between the parties to a dispute as a result of a process of mediation under this
Part shall be recorded in writing and registered with the Court giving the direction under
subsection (1), and shall be enforceable as if it were a judgment of that Court.
5. No appeal shall lie against an agreement referred to in subsection (4).
Other alternative dispute resolution methods.

59C.
1. A suit may be referred to any other method of dispute resolution where the parties agree or the
Court considers the case suitable for such referral.
2. Any other method of alternative dispute resolution shall be governed by such procedure as the
parties themselves agree to or as the Court may, in its discretion, order.
3. Any settlement arising from a suit referred to any other alternative dispute resolution method
by the Court or agreement of the parties shall be enforceable as a judgment of the Court.
4. No appeal shall lie in respect of any judgment entered under this section.
Power to enforce private mediation agreements.

59D. All agreements entered into with the assistance of qualified mediators shall be in writing and may
be registered and enforced by the Court.
The frame work for Court Annexed Mediation has been influenced by International practice of
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Chartered Institute of Arbitrators (Dispute Resolution Centre)-The question is whether the rules
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Uganda and Singapore have some of the most successful Court Annexed Mediation.
THE STRUCTURE OF A FORMAL MEDIATION PROCESS

1. There has to be an agreement to mediate or refer the matter to mediation. It may exist in the
contract itself or drafted by the parties once they want to take the matter to mediation
(Exercise drafting an agreement to mediate).
2. The first step is setting the table-Introduce the parties to the problem put them at ease and
establish your reputation as a mediator.
3. OPENING STATEMENT
Establish the confidence of the parties to the process and the framework
Explain the procedure and terms to the parties (Even if they are experienced to
mediation)
Allow the mediator to explain his role to the parties and allow the mediator to take
charge of the process.
The opening statement should at least contain
i. Preliminary matters (Am your mediator and my name is…)
ii. Introduction of the parties (Are they represented)
iii. What is mediation (Don’t make assumptions)
iv. Mediation terms
v. Mediators roles and responsibilities
vi. Reiterate that the mediator is not a judge and will not provide legal advice.
vii. Reiterate that the mediator is a neutral party (Although this might be difficult in
an informal mediation where the mediator is known to the parties very well).
viii. Reiterate the confidentiality of the process (The deliberations in a mediation
process can not be used in another proceeding).
ix. Ethics of the mediation process (State what the mediator can and cannot do as
well as the parties).
x. Parties’ rights and responsibilities.
xi. Emphasize the voluntary nature of mediation and the parties can stop it at any
time.
xii. It is a self determinate process and the mediator should not influence the
process.
xiii. Parties authority to bind
xiv. Mediation mechanics (e.g. are people allowed to ask questions or how to
handle an impulse or caucusing. What are the rules of caucusing)
xv. Straight forward procedural rules e.g. ground rules,courtesy,one person
speaking at a time, time management, use of phone and electronic device, no
use of profanities, are notes to be taken or not and by whom, are parties going
to make opening statements or if represented by counsel are the advocates
going to speak or not?
xvi. House keeping rules (Breaks and where the bath rooms are).
The mediator acts as an educator, facilitator, moderator, conflict assessor and resource
expander.
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4. THE STORY TELLING PHASE OF MEDIATION

The parties have opportunity to tell their story.
The disputants to hear from each other (It might be for the first time)
To understand each others perspective and also for the mediator to have insight of the
issues.
Determination of interest (The mediator should be able to elicit the interest of the
parties and be able to demonstrate that he understands each of the parties
perspective,needs,interest and concerns)
The goal is to allow the parties to feel heard and paraphrasing brings out the confidence
that they have been heard).
Mediator set out the issues (Mediator may reduce the issues emphasizing the parties
interests).
Parties may have brain storming secessions where the mediator encourages the parties
to generate options
Settlement should be reached to what is duarable and realistic option .BATNA (Best
Alternative to a Negotiated Agreement).If the parties don’t have realistic options then
the mediation is bound to fail. The question is whether a mediator is allowed to give
options?
There are two types of mediators
i. EVALUATIVE MEDIATOR-It is assumed the parties want the mediator to give
direction based on practice, technology and law. And it is assumed that the
mediator is qualified to give options.
ii. FACILITATIVE MEDIATOR-It is inappropriate to give options because

a) It may cloud the appearance of impartiality and there by interfere with
the ability to function.
b) The mediator may not know enough to presume to make these
suggestions.
5. CLOSURE
Transit from selected options to an agreement by the disputants (There is a difference
between closure and enforcement)
Where there is no mediation statute like in Kenya it is enforced as a contract or part of the
Civil Procedure Process.
The agreement must meet the requirements of a valid contract (The question is whether an
oral settlement agreement is enforceable or not).
And if the agreement is in form of a contract then check out for defenses to a contract so
that they don’t arise at a later stage e.g. (Fraud, misrepresentation, ambiguity, impossibility,
mutual mistake, duress or undue influence).All these can lead to unconsentiability of the
contract. See also the provisions of the Consumer Protection Act
Enforcement is also attained through the Civil Procedure Act and the negotiation is covered
by the privilege under section 23 of the Evidence Act. Basically it states that courts infer that
parties have agreed that the evidence should not be given, although the section is not
specifically or directly addressing mediation it allows the parties in principle to engage in
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Admissions made without prejudice in civil cases. (Section 23 of the Evidence Act)
23. (1) In civil cases no admission may be proved if it is made either upon an express condition that
evidence of it is not to be given or in circumstances from which the court can infer that the parties
agreed together that evidence of it should not be given.
(2) Nothing in subsection (1) shall be taken to exempt any advocate from giving evidence of any matter
of which he may be compelled to give evidence under section 134.
See the following three cases
CASE
Lochab Transport vs. Kenya Arab Orient Insurance Limited [eKLR 1986]
The plaintiff motor vehicle KVC 655 was involved in an accident. The vehicle was insured against such an
event with the defendant which as its name indicates is an insurance company. The plaintiff made a
claim under the policy. The defendant agreed to settle the plaintiff claim which settlement is witnessed
by discharge voucher dated the 26th February, 1985. The settlement provided for the payment to the
defendant of a sum of Kshs 352,703/- but it is common case that the defendant has only paid the
plaintiff a sum of Kshs 50,000/-. The plaintiff now claims the outstanding amount due under the
settlement.
The defendant seeks to avoid payment of the sum due under the settlement by setting up a number of
defences but I am satisfied that all these defences are based on a radically mistaken conception of the
law. When a claim is compromised, the cause of action becomes merged and is supersedent by the
compromise and a defence to the original cause of action is not a defence to an action brought to
enforce the compromise. Thus is the present case, the defendant cannot rely as it has sought to do on
the arbitration clause in the policy of insurance to stay the action founded on the compromise. On this
point see Green vs. Reson [1955] 1 W L R 741 and in particular the observations of Slade J. at p. 746 and
Conlon vs Conlas Ltd. 1952 2 TLR 343.
The defendants alleged certain breaches of the policy by the plaintiff which are set out in paragraphs 3
and 4 of the defence and say in paragraph 6 that had they known these facts earlier they would have
repudiated the plaintiff’s claim from its inception. The defendant formally repudiated the claim (that is
the claim under the policy) on the 14th day of October, 1986 almost 8 months after its agreement to
settle the plaintiff’s claim. I cannot envisage how the repudiation of the policy can assist the defendant
in resisting a claim for the enforcement of a settlement already made of a claim made under that policy.
If the defendant wishes to resist the enforcement of the settlement of the plaintiff’s claim, it must
attack the settlement itself by seeking to show that the settlement was procured by some fraud or
fraudulent misrepresentation by the plaintiff or that it was concluded. There are no pleas in the defence
that would enable the Court to grant such relief.
The plaintiff has asked for summary judgment on his claim. The defendant in his notice of objection has
stated that the defence raise substantial issues for trial and that the case should proceed to hearing and
determined on merit.
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The issues raised are:

(1) that the plaintiff has been in breach of some of the conditions of the policy.
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These for the reason I have stated might be a substantial ground of defence were this an action to
enforce a claim under the policy. It is not. It is an action to enforce a settlement or compromise of a
claim made under the policy. As such it is not a ground of defence to the plaintiff’s claim.
(2) that the dispute should have been referred to arbitration (para 8 of the defence).
It is not a dispute out of the policy it is a dispute arising out of a settlement or compromise made
between the parties arising from a claim made by the plaintiff under the policy.
(3) that the compromise was ‘entered into without prejudice and or without admission of liability.’
I do not understand this plea. It could only be made by a lawyer who did not understand the
significance of the words ‘without prejudice.’ You cannot have an agreement made without prejudice. If
an offer is made ‘ without prejudice’, evidence cannot be given of this offer. However, if this offer is
accepted, a contract is concluded and one can give evidence of the contract and given evidence of the
terms of the ‘without prejudice’ latter offer. See the quotation from Walker vs Walker 23 QBD 335
referred to by Mr Wandaka and
(4) the compromise was entered into under mistake and ignorance of the facts as set out in
paragraph 4 of the defence. Is this defence? Can one avoid performing one’s bargain because one has
learnt something that one didn’t know when one made the bargain? I think not. It is plainly from the
correspondence exhibited by both the plaintiff and the defendant in the various applications made
herein that the matters complained of were discovered by the defendants after investigations instigated
by it after it had concluded the settlement of the claim with the plaintiff. One asks why didn’t the
defendant do this before it had settled the claim with the plaintiff? It does not speak highly of the
defendant’s good faith. No reason has been advanced as to why the defendant did not carry out the
investigation prior to the settlement of the dispute. One cannot but feel that this late embarked – on
investigation. Connotes a reluctance to pay and nothing else. It does not reflect favourably on the prelity
of the defendant.
In order for the defendants to avoid payment of the claim on this last ground it must show that its
mistake rendered the contract nullity one naturally turns to the decision of the House of Lords in Bell vs
Lever Brothers. I feel that the best and briefest statement of what that cure decided is Lord Denning
(then Denning L J) in Solle vs Butcher [1950] 1 TLR at p 458, which reads: “Let me first consider mistakes
which render a contract a nullity. All previous decisions on this subject must now be read in the light of
Bell vs. Lever Bros. Limited (48 The Times L R 133; (1932) A C 161). The correct interpretation of that
case, to my mind, is that, once a contract has been made, that is to say, once the parties, whatever their
inmost states of mind, have to all outward appearances agreed with sufficient certainty in the same
terms on the same subject-matter, then the contract is good, unless and until it is set aside for failure of
some condition on which the existence of the contract depends, or for fraud, or on some equitable
ground. Neither party can rely on his own mistake to say that it was a nullity from the beginning, no
matter that it was a mistake which to his mind was fundamental, and no matter that the other party
knew that he was under a mistake.”
In this case a contract to settle the plaintiff’s claim under the policy was clearly made. The sending of a
completed discharge voucher to the plaintiff was plainly an offer. His signing and returning the same
was clearly an acceptance. The parties had to all outward appearances settle the claim. The contract is
good unless and until it is set aside for failure of some condition which the existence of the contract
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depends or for fraud or on some equitable ground. It has not been so set aside and I think an application
seeking this remedy would have little success.
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Accordingly, I give judgment for the amount claimed with interest at court rates thereon (only in view
of H L decision in President of India vs La Prutention Liu (1984) 2 A E 713) from the date of the filing of
the plaint. The plaintiff is entitled to his costs.
CASE
Millicent Wambui vs. Nairobi Botanica Gardening Ltd [IC Cause No 2512 of 2012]
The scope of “without prejudice” communications
Issue
i. Whether communications marked as “without prejudice” could be adduced as evidence in court

where the parties had not reached a compromise.
Evidence -admission – doctrine of without prejudice – ambits and rationale of the doctrine – where the
applicant sought to have the suit marked as compromised – claim by the respondent that no compromise
had been reached – whether admissions which parties did not intend to be adduced in subsequent cases
would be admissible.
Held:
1. The words “without prejudice” imposed upon the communication an exclusion of use against
the party making the statement in subsequent court proceedings. It was a well-established rule
that admissions, concessions or statements made by parties in the process of trying to resolve a
dispute could not be used against that party if the dispute was not resolved thus resulting in
litigation.
2. The term “without prejudice” was used by parties as a means to enable offers and counter
offers to be made to settle disputes or claims without fear that the said letters would later be
used by the opposite party as an admission of liability in the ensuing lawsuit.
3. A party makes a “without prejudice” offer on the basis that they reserve the right to assert their
original position, if the offer was rejected and litigation ensued.
4. For correspondence between parties to be protected it had to be made in a genuine attempt to
settle a dispute between the parties. The protection afforded by that phrase being limited to
negotiations for compromise.
5. The rule which excluded documents marked “without prejudice” had no application unless some
person was in dispute or negotiation with another, and terms were offered for the settlement of
the dispute or negotiation. The judge was entitled to look at the document in order to
determine whether the conditions, under which the rule applied, existed. The rule was adopted
to enable disputants without prejudice to engage in discussion for the purpose of arriving at
terms of peace, and unless there was a dispute or negotiations and an offer the rule had no
application. (Re Daintrey ex Holt [1893] 2 QB 116).
6. The “without prejudice” material could be admissible if the issue was whether or not the
negotiations resulted in an agreed settlement. The judge would be permitted to look into the
letters exchanged to ascertain the character of the negotiations and whether there was indeed
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an agreement which would take the matter out of the purview of the protection afforded by the
“without prejudice” tag. (Walker v Wilsher (1889) 23 QBD 335)
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7. The letters exchanged between the parties were in the class of communication to which the

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principles on “without prejudice” apply. This was because the letters were seeking to settle the
dispute amicably.
Application dismissed with costs.
CASE
Nzau vs. Mbuni Transporters [eKLR 1990]
Evidence – admissions – doctrine of without prejudice – ambits and rationale of the doctrine – whether
admissions which parties did not intend to be adduced in subsequent proceedings are admissible –
whether pretrial negotiations can be resiled – Evidence Act (Cap 80) section 23. Judgment – consent
judgment – nature of such a judgment – whether parties to a consent judgment can challenge it later.
The plaintiff applied for judgment based on a figure allegedly arrived at after out-of-court negotiations.
This was provoked by the fact that the defendant had later resiled from the settlement.
The defendant raised a preliminary objection and contended that the application for judgment was not
competent as it was grounded on without prejudice correspondence which was inadmissible.
The plaintiff submitted that the principal question was whether the without prejudice correspondence
were discoverable in a civil suit. It was further submitted that the without prejudice doctrine has no
legal sanction particularly under the Evidence Act (Cap 80).
Held:
1. It is the policy of the law that disputes should be amicably settled, and where possible, parties should
be at liberty to freely admit certain facts to facilitate a settlement without the fear of such facts being
used against them in subsequent proceedings if the attempt to settle is not successful. The privilege is a
rule of evidence which stems from public policy.
2. Being a rule of evidence, the without prejudice doctrine must not be taken to be confined to
discovery alone. Nor can it be treated to apply only in cases where an attempted settlement is
unsuccessful.
3. The rationale of the without prejudice doctrine is to encourage parties to a dispute to engage in pre-
trial and out-of-court settlements without fear that admissions of certain facts would be used against
them to their prejudice.
4. Section 23 of the Evidence Act (Cap 80) renders as inadmissible admissions which the parties either by
an express condition or by implication, did not intend to be adduced in subsequent proceedings.
5. Section 23 of the Evidence Act (Cap 80) accords protection to any pretrial admissions made without
prejudice unless the consent of the other party or parties to it is first obtained.
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6. The effect of section 23 of the Evidence Act (Cap 80) is to place a party who entered into pre-trial
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negotiations at liberty to resile before judgment is entered.
7. In general terms, a judgment entered into on the basis of pre-trial negotiations is a consent judgment.
Such judgment is in the nature of an agreement binding both sides.
8. Once a consent judgment is entered, parties to it will be estopped from challenging such judgment
later, unless on grounds which would vitiate a contract.
Preliminary objection sustained.
It is the policy of the law that disputes should be amicably settled and parties should freely
admit facts. In order to facilitate settlement without fear that the facts may be used against
them. The rationale is the without Prejudice Principle is to allow the parties to engage in out
of court settlement
Should a party pull back to what is an apparent agreement Order 25 of the Civil Procedure
Rules could come to the aid of the other party.
ORDER 25 -WITHDRAWAL, DISCONTINUANCE AND ADJUSTMENT OF SUITS

[Order 25, rule 5.] Compromise of a suit.
5. (1) Where it is proved to the satisfaction of the court, and the court after hearing the parties directs,
that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the
defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the
court shall, on the application of any party, order that such agreement, compromise or satisfaction be
recorded and enter judgment in accordance therewith.
(2) The Court, on the application of any party, may make any further order necessary for the
implementation and execution of the terms of the decree.
There could also be the use of a discharge voucher and sheet.

It is sometimes prudent for the lawyer to be involved hence consider whether to get some
discharge indemnity.
EXERCISE:DRAFT AN OPENING STATEMENT
OPENING STATEMENT
Good afternoon, my name is _______________. I am a certified mediator and have been trained to hear
disputes such as the one before us today. My purpose here today is to act as the mediator in this case
and to assist you in the resolution of the dispute that brings us to this table.
Let me begin by stating that I am not acquainted with the parties involved in this dispute. I am not here
to represent either side, any particular position. I will not express partiality or take sides during this
process. My goal is to assist each of you in reaching an acceptable settlement of this matter. I have no
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power to impose a decision on you or to decide how this matter should be settled. This is where
mediation differs from other forms of dispute resolution...you are still empowered with the ability to
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I sent each of you a letter outlining what you should expect in a mediation session and asking you to
verify that you willingly accept the opportunity to participate. So that you are both comfortable with
each other’s good intentions, I want to assure each of you, I have signed agreements to participate in
this process from each of you. I want to remind you that this is not a court of law or a legal proceeding.
Therefore, we are not bound by the formal rules of evidence.
Should you desire at a later time, to pursue this matter in a court of law or an administrative system, this
proceeding will in no way delay or interfere with your right to do so. I will not willingly testify for or
against either of you in an administrative or court proceeding regarding the information unique to this
conference.
Confidentiality is a critical part of the process. Generally, if you tell me something in private and ask me
to keep it confidential, I am bound by law not to disclose this information voluntarily. There are some
obvious exceptions to this rule, but I do not expect them to arise during our mediation. For example, if
you confess to the commission of a criminal offense, or to an act of fraud, waste, or abuse, or that you
plan to commit a violent physical act, I may be required to share this information with appropriate
authorities. If a judge determines that disclosure of our private confidential discussions is necessary to
prevent a manifest injustice,establish a violation of law, or prevent harm to the public health or safety,
we may be required by a court to disclose our private discussions.
Having said that, I want you to please remember that facts that were discoverable before the mediation
session do not become confidential merely because they were presented during a mediation
conference. It is only those things you say or write in confidence to me during the mediation that I will
not disclose, unless one of the unusual exceptions I discussed above applies.
This means that both the mediation agreement and the resulting settlement agreement, if any, are not
confidential. For example, certain Air Force officials will have to review the proposed settlement
agreement before it becomes binding on the Air Force -- so the agreement itself cannot be kept
completely confidential.
Before we begin, let me explain the procedure we will use. When I complete these preliminary
statements each of you will have the opportunity to make an uninterrupted opening statement to
describe the problem as you see it. It is customary for the party that brought the matter to our attention
to begin first, therefore, Mr./Ms. ___________ I will ask you to begin. When you have completed your
opening remarks, I will ask Mr./Ms.___________ to make an uninterrupted opening statement.
After that, we will transition into a joint discussion centering on possible solutions, I ask that each of you
be thinking of how you might like to resolve this matter. At some point, I will meet with each of you
separately. This is called a caucus. I will use the caucus to help me clarify in my mind some concerns I
may have as we talk, and to be of more assistance in helping you resolve your dispute. I may use the
caucus any number of times, and the length of each caucus should not be of concern to either of you.
The information you share during the caucus is also confidential and will not be shared during open
discussion unless you specifically give consent to such disclosure.
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When you reach agreement, it will be written, and each of you will be asked to verify and sign it. I will
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also sign it as a witness. Each of you will be provided with a copy of the agreement today. Appropriate
authorization may be required for the agreement to become binding and if so, we will note that in the

lOMoARcPSD|7588137
agreement.
At this time please turn off all cell phones, pagers and electronic devices. Let me once again
congratulate you for being here today to try to work this out. Your presence here today demonstrates
your willingness to attempt cooperative problem-solving. Are there any questions at this point? If not,
let’s proceed with Mr./Ms._________’s opening statement.
EXERCISE :DRAFT A SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT
Case name and number:
SYNOPSIS OF ALLEGATIONS:
The parties to this agreement are:
The parties hereby agree to settle this dispute in its entirety on the terms set forth below:
1. Payment: Defendant, agrees to pay Plaintiff the sum of Kshs. in partial settlement of this
matter along with additional terms set forth below. Said sum to be paid by check made out
to and his/her counsel and delivered to counsel not later than 14 calendar days from today.
2. Release and Dismissal: Plaintiff will execute a release and dismissal with prejudice of the action
upon receipt of the above funds.
3. Cost: All parties will bear their own attorney fees and all other costs of suit, including mediator
fees.
4. No Admission of liability: Signing this settlement agreement or complying with its terms does
not constitute an admission of liability on behalf of any party.
5. Representative capacity: Each person signing this agreement in a representative capacity
warrants that he or she has full authority to bind his or her principal to this agreement.
6. Enforcement (If litigation pending): By signing this agreement the parties acknowledge that it is
enforceable pursuant to Civil Procedure Act
7. Binding Agreement: It is the intent of the parties that this agreement is binding and
enforceable. Pursuant to Evidence Act it is an admissible document to prove the parties’
agreement.
8. Integration: This Agreement represents the complete understanding between the parties. No
other promises or agreements shall be binding or shall modify this Agreement unless signed by
the parties.
9. Mediator is Not a Legal Advisor: If the mediator or arbitrator assisted in the preparation of this
settlement agreement the mediator or arbitrator did not act as an advocate for any party or give
legal advice to any party, each party is advised to have the agreement reviewed by his or her
own legal counsel before signing the agreement.
OPTIONAL CLAUSES
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1. Absent Party Signature: This Agreement may be signed in counterparts and on separate
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2. Arbitration: If a dispute arises over the terms of, or whether there is compliance with, this
agreement, the parties agree to submit such dispute for binding arbitration by an arbitrator of
their mutual selection.
3. Future Mediator Fees: In the event of a dispute or litigation arising out of this settlement
agreement or the settlement contemplated hereby, the prevailing party shall be entitled to
recover reasonable attorney fees, expenses and costs.
4. Liens: Plaintiff will be responsible for paying all liens in this matter.
5. Confidentiality: All parties and counsel agree that this settlement is confidential and the amount
is not to be disclosed to anyone other than immediate family members, law firm members or
others with a legal need to know or pursuant to a court order. If any party or counsel is asked
about the resolution of this matter, the only allowable response is, “the matter was resolved to
the satisfaction of all parties and the settlement terms cannot be disclosed.” All parties and
counsel agree that a determination of actual damages for breach of this agreement may be
difficult, impractical or impossible to calculate, and they therefore, agree to liquidated damages
in the amount of Kshs.1,000 in the event of a breach of this clause. Plaintiff’s
initials_____ Defendant’s initials _____
6. Payments: (Alt.) Defendant agrees to pay the total sum of Kshs . Said sum is payable as
follows: Kshs. on or before .The balance will be paid by installment payments in the amount
of on the first of each month beginning on . Payments are to be made by check payable
to and delivered to . If any payment is not received within 5 days of the due date the entire
balance will become due and payable and Plaintiff may obtain a judgment by ex parte motion
before a judge of the Superior Court in an amount equal to the balance due.
7. Liquidated damages: Actual damages may be difficult, impractical or impossible to calculate,
therefore Plaintiff may add to the balance due, Kshs.1,000 in liquidated damages for failure to
make payments in a timely manner. Plaintiff’s initials_____ Defendant’s initials
_____
8. Conditional Settlement: All parties agree and understand that this agreement on behalf of
the is subject to approval of the before it can be binding upon the . Counsel for
the agree that they will recommend to the to approve this agreement and will make
his/her best effort to secure that approval and to secure that approval at the earliest reasonable
date.
9. Reports to Authorities: All parties stipulate and agree that there is no admission of liability,
wrongdoing or improprieties and that they agree that they have not, and will not, file any
complaint with any governmental authority or administrative agency, including but not limited
to ……
10. Non-Disparagement: All parties agree that they will not make any disparaging or negative
statement, written or oral, or engage in any negative communication about any opposing party
or any opposing party’s representatives or employees, or any opposing party’s work,
professional conduct or business.
11. More Formal Agreement Anticipated: The parties agree that this agreement, although binding
and enforceable, will be replaced by, or supplemented by, a more formal agreement prepared
by counsel within the next seven calendar days.
12. Cooperation on Documents: All parties agree that further documents will need to be prepared,
formulated, signed or filed in order to consummate this agreement. All parties agree to
cooperate in this process.
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SIGNATURES OF PARTIES:
Signature: ___________________________________________ Date: February 25, 2014
Typed Name:
Typed Name:
APPROVED AS TO FORM BY COUNSEL BELOW:
Typed Name:
Typed Name:
EXERCISE :LIST THE CHARACTERISTICS OF INFORMAL MEDIATION
ROLE OF A LAWYER IN MEDIATION

Representing a client in mediation does not change the lawyer’s basic duty to act in the best
interest of the client.
There are however differences in the way in which that duty can most effectively be carried out.
The lawyer must have regard to the fact that the client has chosen to try and resolve the dispute
in a consensual and not in an adjudicatory manner or forum which requires a suspension of the
adversarial mode of practice.
Results can be achieved for the client in a way that does not necessarily involve having to defeat
the other side but rather by seeking solutions that are mutually beneficial as far as possible; this
requires a difference of approach on the side of the lawyer.
On the other hand each party will invariably still wish to achieve the best possible result in
mediation and strong positions and tough negotiations may as well take place.
The lawyers task is to balance these competing requirements and tensions in a way that
produces the best outcome for the client.
Mediation vs. Litigation and Arbitration

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Mediation is a confidential, private process in which a neutral third-party guides disputing parties in a
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their positions and proposals, listens thoughtfully to each, clarifies issues in dispute, searches for
solutions that address the needs of all and works toward a fair, workable settlement to the dispute. The
parties themselves are the decision-makers. This attribute, known among professional mediators as self-
determination, is what makes mediation unique.
Arbitration and litigation also involve a neutral third-party, but can be distinguished from mediation in
several respects. They are more formal and structured processes involving the presentation of
testimony and production of documents. Generally, court proceedings are conducted in public and
strictly according to sets of rules and procedures that can be enforced by the judge. The third-party
neutral is also responsible for determining the final outcome of the dispute.
Mediation, by contrast, is a less formal and relatively uncomplicated process involving the disputants in
discussions directly and indirectly with one another and empowering them with the responsibility for
the outcome.
Given the more central role of disputants, what then, are the tasks and responsibilities of attorneys in
mediation? To answer this question, it is necessary to examine the role of attorneys in two phases—pre-
mediation and during mediation.
Pre-Mediation
As with litigation and arbitration, adequate preparation is vital to a successful mediation, and attorneys
can prepare their clients by discussing the following:
What is mediation and how the process is conducted. They may contrast mediation with other
processes familiar to the client. They should point out that mediation is essentially a problem-solving
process that has as its goals a thorough discussion of all issues in dispute, the exchange of information,
ideas and proposals and the opportunity to seek creative solutions to the dispute.
The differences between mediation, litigation or unassisted negotiations, and attorneys may explore
whether participating in mediation is likely to be a positive and fruitful exercise.
The role of the mediator, as a manager of the process, a facilitator of negotiations and a guide in the
effort to secure a full settlement. In particular, attorneys emphasize that, in mediation, clients usually
speak on their own behalf and are directly involved in making decisions with respect to the dispute.
However, the value of attorneys at mediations should not be discounted as they often assist in moving
the process forward.
Attorneys should also inform their clients of the opportunity for private discussions either with the
mediator or with the attorney and client only.
With respect to the issues in dispute, attorneys and clients should discuss opportunities for resolving the
dispute, the range of possible outcomes, the issues on which the client may have greater or lesser
flexibility for settlement and the minimum terms and conditions the client will accept. Attorneys should
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also have a frank discussion of the alternative to settlement and, in particular, the cost, time and risks of
litigation.
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As they would in litigation or arbitration, attorneys must ensure that all documents and other materials
essential to a complete discussion and resolution of the issues are prepared, reviewed and available at
(or sometimes exchanged prior to) mediation. Resolving the dispute will depend in significant measure
on the completeness of information available.
During Mediation
The greatest shift in the attorney’s role and responsibilities arises once mediation begins. During
mediation, attorneys typically assist their clients in some of the following ways:
They acknowledge the client’s central role and, in particular, do not speak for the client; instead,
attorneys offer advice, guidance and information.
They do not challenge or cross-examine the other party, spar with the other attorney or, in
other ways, treat mediation like litigation.
Attorneys maintain a supportive, cooperative demeanor and demonstrate commitment to the
mediation process by words and behavior. They do not treat mediation as an adversarial process
or as a means for finding the truth; instead, they acknowledge the importance of searching for
solutions. Attorneys assist in defining the issues to be resolved.
They provide normative information, usually in private, about the benefits and risks of specific
proposals.
They act as an agent of reality, helping the client to balance the risks of accepting or rejecting
settlement offers and the potential complications of presenting the case to a third party for
decision as well as the time, stress and expense of a trial.
Attorneys help manage the process by asking for breaks, for opportunities to speak privately
with the client or for a private meeting with the mediator.
They assist clients to communicate by summarizing discussions or clarifying matters that are
confusing or where miscommunication is preventing constructive problem-solving, or worse,
leading to increased conflict.
They help clients stay focused on the issues at hand, the information presented and options for
settlement as well as remain calm as they deal with frustration over the pace of progress or
feeling overwhelmed by direct confrontation with the other party.
Attorneys encourage clients to find creative solutions that will resolve the dispute.
They draft documents as required.
Those attorneys who view mediation genuinely as an opportunity for their clients to participate actively
in discussions about, and settlement of, their own disputes are valued allies in the process.
This view is expressed repeatedly in comments from parties and mediators in the Court-Annexed
Mediation Pilot Project. In discussing the role of the attorneys, one mediator notes:
I used the attorneys a lot. I spoke to them separately,...I didn’t give an opinion, but did a lot of talking
about risk...Generally I worked with the attorneys and then sometimes left them to sell an idea to their
clients, or sometimes sat in with them.
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Another mediator expresses appreciation for the attorneys in helping to resolve a very contentious
mediation, in this way:
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...the attorneys from both sides were very helpful in bringing clarity regarding their legal positions. It was
very fruitful and they were able to settle everything.
At times, the shift from advocacy to advice collaboration can be awkward and unsettling for many
attorneys. Recognizing that their clients benefit from this collaborative role, and that mediators
appreciate their constructive participation, attorneys should utilize mediation as they would any other
dispute resolution process—wisely and with due regard for their particular role in making the most of its
unique attributes. In managing the transition to mediation advocacy, attorneys may benefit from
additional educational programs and seminars where they can learn to use their knowledge, experience
and skills in support of their clients’ participation in this helpful and constructive process.
The transition from trial advocacy to mediation advocacy may be challenging, but the rewards are worth
the investment of time and energy.
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What is Mediation?
Mediation is an informal, confidential conflict resolution process in which an impartial third party helps
two or more participants better understand their issues, interests and needs and empower them to
bridge their difference through a voluntary agreement. The main characteristics of mediation are:
Impartiality: Mediators have no stake in the matter. They don’t make a decision or advocate for either
participant. They do help the participants communicate effectively and make decisions about how to
resolve the matter.
Confidentiality: Mediation is strictly confidential, both for the mediator and the participants.
Informality: The mediation process is designed to be flexible and user-friendly.
Voluntary agreement: Participants have ultimate control and decision-making power over the outcome
of the mediation.
How does it work?
Mediation services are easy to use - there are three basic steps:
Step 1 - Intake: Mediation is initiated by a request to the Mediation Services Office (MEF). That request
can be a simple e-mail sent, a phone call or walk-in to the office. Any current or former staff member or
consultant may request a mediation for any work-related issue. Once a request is received, MEF will
contact all participants to conduct an intake. The purpose of the intake is to ensure the participants’
understanding of the process and to help MEF determine whether the case is appropriate for mediation.
Step 2 - Mediation: if the case is deemed appropriate for mediation, participants will be asked to come
to an initial mediation session. The participants are required to sign an Agreement to Mediate and may
rank their preference of the mediator from MEF’s list of internal and external mediators. After the first
session, any participant is free to decide whether they want to continue with the process or withdraw
from it.
Step 3 - Agreement: If the issues are settled through mediation, the mediator will draft a Memorandum
of Understanding (MOU) which records specific agreements made by all participants. By signing an MOU
neither participant admits fault. However, a signed MOU is a binding commitment for all the
participants.
How useful is it?
Mediation works: 80% of cases that use mediation reach an agreement, and over 95% of participants
find mediation very useful, regardless of the outcome.
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As an opportunity to increase the quality of the communication and relationships, mediation is

immensely valuable. However, mediation is most effective in the early stages of a dispute.
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Mediation is an informal, non-confrontational process in which solutions are not imposed on the parties
but the product of a voluntary agreement. No lengthy, time consuming preparation is required and
sessions are scheduled at times and places that are convenient to all participants involved.
What are the advantages of mediation?
Mediation is forward-looking: Participants have the opportunity to rebuild relationships that have been
strained. This can be key for the ultimate, lasting resolution.
The participants are in control: They resolve the dispute on their own terms and not one imposed by
others. They may also decide to withdraw from mediation after the first session, if desired.
The participants can tailor solutions that meet their needs: The flexibility and creativity of the solution
building process focuses on the interests of the participants, allowing all participants to feel satisfied
with the outcome.
Agreements reached in mediation are final and binding: The participants memorialize their agreement
in the form of a Memorandum of Understanding (MOU). The MOU does not constitute an admission by
the participants of any blame or guilt. However, the agreement is final and binding for the participants.
Mediation is confidential: This allows participants to be open and honest about the issues without fear
that their words will be used against them or taken out of context.
EXERCISE: Consider if lawyers need specific training for mediation or not.
EXERCISE: Consider whether 2007 Koffi Anann mediation was a success or a failure.(Conflict Dispute
or Non Conflict Dispute)
EXERCISE: Consider what is the significance of without prejudice discussions in ADR in particular to
negotiations and mediation
EXERCISE:Consider a good negotiator is not necessarily a good mediator discuss?
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LECTURE 5, 6, 7 and 8: 10TH FEBRUARY- 3RD MARCH 2014- 5.30-7.30PM (LECTURE HALL B2)
TOPIC 4: ARBITRATION
INTRODUCTION AND HISTORICAL DEVELOPMENT
Arbitration is where two or more persons agree that a dispute between them shall be decided in
a legally binding way by one or more persons who are impartial and that decision shall be made
in a judicial manner i.e. upon evidence being put before the impartial person or persons.
The agreement itself is termed as an Arbitration Agreement (If it is done before the dispute) or
a Submission Agreement (If it is done after the dispute).
When the dispute has arisen and it is put before the adjudicating person the procedure is called
Arbitration.
The person adjudicating is known as Arbitrator or Arbitration Panel where they are more than
one.
The decision that is made by an arbitrator or arbitration panel is known as Award.
Halsbury laws of England (3rd Edition) defines Arbitration as “This is a process by which a dispute
or difference between two or more parties as to their legal right and liabilities is referred to and
determined judiciously and with binding effect by one or more persons instead by a court of
law”.
Arbitration has certain features which include:
i. There is a hearing in a judicial manner following the rules of natural justice.
ii. Giving evidence to prove the facts.
iii. The decision made is binding.
The parties are free to choose their own procedure and parties can either have one or more
arbitrators.
Section 3 (1) of the Arbitration Act No.4 of 1995 (he by called The Act) defines an Arbitral
Tribunal to mean a Sole Arbitrator or a Panel of Arbitrators.(It contemplates that there can be
more than one arbitrator).
The dispute may be referred to arbitration by the parties (Through an agreement or submission)
however some statutes which compel parties to refer their disputes to arbitration for example
i. The Kenya Ports Authority Act Cap 391 (Section 62 (1))
ii. The Inter-Governmental Relations Act
iii. The xxxxx Act
It is the parties who define the scope of the matters to be referred arbitration i.e. the
parameters of the dispute.
The jurisdiction of the Arbitral Tribunal is also to this extent set by the parties themselves.
The decision of the Arbitral Tribunal is rendered through a judicial process where both parties
are heard and guided by principles of fairness and the decision is arrived at after a fair appraisal
of the available evidence.
THE ARBITRATION ACT (Act No 4 of 1995)
The Arbitration Act of 1995 is based on the UNCITRAL Model Law on the International
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Commercial Arbitration.
UNCITRAL is one of the agency of the UN that works towards the harmonization of International
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One of their best work is the document they developed called UNCITRAL Model Law on
International Commercial Arbitration.
The Model Law is available for adoption by different countries with or without amendments.
There are four principles behind the model law
i. Firstly it provides for broad party autonomy in the crafting of the arbitration process.
ii. The model law provides for the principle of fairness and equity.
iii. Where the parties do not design or craft their own process the model law has a fall back
position on how the proceedings should be conducted.
iv. The model law seeks a supportive relationship between the courts and the Arbitral
Tribunal.
Arbitration is a private process hence has some inherent problems e.g enforceability hence it
might require the court to enforce it.
The previous Act in Kenya (1968 Arbitration Act) was faulted because it had too much court
intervention.
The Model Law seeks to balance court intervention and court assistance in the arbitration
process.
HISTORICAL DEVELOPMENT OF ARBITRATION LEGISLATION IN KENYA

For more text about the History one could look at Eugene Contran’s Arbitration in Africa (1996).
There has been three major periods in Arbitration Legislation in Kenya.
1. FIRST GENERATION
The first generation is from the onset of colonialism to the 1960.
The Arbitration Legislation was based on the commonwealth countries 1889 UK Arbitration
Act.
The Kenyan Arbitration Ordinance of 1913 was the first Ordinance specifically for Kenya. It was
largely modeled on the 1889 UK statute .The statute was scanty and had substantive judicial
review and case stated procedure.
The statute did not distinguish between adhoc and institutional arbitration neither did it
distinguish between domestic and international arbitration.
2. SECOND GENERATION
The second generations of arbitration laws in Commonwealth Africa were influenced by the
1950 UK Arbitration Act, which was largely been repealed and replaced by the 1989 UK
Arbitration Act.
In Kenya the 1968 Arbitration Act Repealed was based on the 1950 UK Statute, they had the
same draw backs as the first generation i.e. the use of case stated procedure.
The features rendered them inadequate for modern arbitration.
3. THIRD GENERATION
The third generation was enacted after 1985 and they adopted the UNCITRAL Model either
partly or wholly.
Various countries in Africa adopted the UNCITRAL Model at different times e.g
i. Kenya 1995
ii. Madagascar 1998
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iii. Egypt 1994

iv. Mauritius 2008
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v. Nigeria 1990

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vi. Rwanda 2008

vii. Uganda 2000
viii. Zambia 2000
ix. Zimbabwe 1996
Other trading partners of Kenya

i. China 2010
ii. India 1996
Major Exclusions include (Tanzania, South Africa and UK)
The UNCITRAL Model is made of several different documentation e.g.

i. The Arbitration Rules of 1976
ii. The Conciliation Rules of 1980
iii. The Model Law of 1985
iv. UNCITRAL Notes in organizing Arbitral Proceeding 1995.
Different Countries Responded in various ways e.g.

i. In UK- Lord Mustil recommended against the model but recommended a modest the
review of the existing Act hence the 1989 Act.
ii. Scotland – formed a committee and adopted the law
iii. South Africa- formed a committee and they recommended to use the model for
International Arbitration but retained the domestic law for domestic arbitration
iv. Kenya –The Hansard report on 3rd July 1995 the then AG (Wako) placed a strong
argument for the adoption of the model stating that the country would attract
international arbitration business and form an arbitration centre under the Africa-ASEA
legal group.
IMPORTANT CONSIDERATIONS
1. The fundamental features of the 1995 Arbitration Act
2. The Arbitration Act and consider all the instances where a court may intervene. Also consider if
there are particular omissions or there are too may (interventions by the court)
3. Write short notes from Chapter 1 of Githu’s Book (Githu Muigai and Jacqueline Kamau Article)
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THE LEGAL FRAMEWORK OF ARBITRATION IN KENYA-BY GITHU MUIGAI AND JACQUELINE KAMAU
INTRODUCTION
Article 159 (2) of the Constitution enjoins courts in exercising their judicial authority to be
guided by a set of fundamental principles chief among them is to promote alternative forms of
dispute resolution including reconciliation,mediation,arbitration and traditional dispute
The Civil Procedure Rules have already been expanded to accommodate ADR.
THE ARBITRATION ACT, 1968 (NOW REPEALED)

This Act was closely modeled on the English Arbitration Act of 1950.
One of the main criticisms of the 1968 Act was that it did not limit the extent to which the court
could intervene in the arbitration proceedings, consequently delays in arbitration proceedings
as a result of references to court were frequent and often defeated the purpose of arbitration
i.e. to allow the parties solve their disputes expeditiously and at the least cost.
This reason and the publication of UNCITRAL made the parliament enact the 1995 Arbitration
Act that repealed the 1968 Act.
THE UNCITRAL MODEL ARBITRATION LAW 1985

The UNCITRAL Model Law on International Commercial Arbitration (“The Model law”) was
adopted in 1985.
The purpose of the Model Law was to provide a law acceptable to states with different legal,
social and economic systems and contribute to the establishment of a unified legal framework
for the fair and efficient settlement of disputes arising in international commercial relations.
The model law covers
i. All stages of the arbitral process from the arbitration agreement.
ii. The composition of the arbitral tribunal
iii. The jurisdiction of the arbitral tribunal
iv. The extent of court intervention
v. Recognition and enforcement of the award.
THE ARBITRATION ACT, 1995
The Arbitration Act, 1995 was assented to on 10th August 1995 and come into force on 2nd
January 1996.
The Act is substantially modeled along the provisions of the UNCITRAL Model Law on
International Commercial Arbitration.
Key Features of the Arbitration Act 1995
1. Distinguishes Between Domestic and International Arbitration

i. Domestic Arbitration
Under the Act an arbitration is domestic if the arbitration agreement provides
expressly or by implication for arbitration in Kenya and at the time when
proceedings are commenced or the arbitration is entered into
a) Where the arbitration is between individuals, the parties are nationals
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of Kenya or are habitually residents in Kenya.

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b) Where the arbitration is between bodies corporate the parties are

incorporated in Kenya or their central management and control is
exercised in Kenya.
c) Where the arbitration is between an individual and a body corporate
i. The party who is an individual is a national of Kenya or is
habitually resident in Kenya.
ii. The party that is a body corporate is incorporated in Kenya or its
central management and control are exercised in Kenya
d) The place where a substantial part of the obligations of the commercial
relationship is to be performed or the place with which the subject
matter of the dispute is most closely connected is Kenya.(See Section 3
(2) of the Act)
3. Interpretation
1. In this Act, unless the context otherwise requires—
“arbitration” means any arbitration whether or not administered by a permanent arbitral
institution;
“arbitration agreement” means an agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise between them in respect of a defined
legal relationship, whether contractual or not;
“arbitral award” means any award of an arbitral tribunal and includes an interim arbitral award;
“arbitral tribunal” means a sole arbitrator or a panel of arbitrators;
“party” means a party to an arbitration agreement and includes a person claiming through or
under a party.
2. An arbitration is domestic if the arbitration agreement provides expressly or by implication for
arbitration in Kenya: and at the time when proceedings are commenced or the arbitration is
entered into—
a) Where the arbitration is between individuals, the parties are nationals of Kenya or are
habitually resident in Kenya;
b) Where the arbitration is between bodies corporate, the parties are incorporated in
Kenya or their central management and control are exercised in Kenya;
c) Where the arbitration is between an individual and a body corporate—
i. the party who is an individual is a national of Kenya or is habitually resident in
Kenya; and
ii. the party that is a body corporate is incorporated in Kenya or its central
management and control are exercised in Kenya: or
d) The place where a substantial part of the obligations of the commercial relationship is to
be performed, or the place with which the subject matter of the dispute is most closely
connected, is Kenya.
3. An arbitration is international if—
a) the parties to an arbitration agreement have, at the time of the conclusion of that
agreement, their places of business in different states;
b) one of the following places is situated outside the state in which the parties have their
places of business—
i. the juridical seat of arbitration is determined by or pursuant to the arbitration
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agreement; or
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the dispute is most closely connected; or

c) the parties have expressly agreed that the subject-matter of the arbitration agreement
relates to more than one state.
4. For the purpose of subsection (3)—
a) if a party has more than one place of business, the place of business is that which has
the closest relationship to the arbitration agreement; and
b) if a party does not have a place of business, reference is to be made to his habitual
residence.
5. Where a provision of this Act, except section 29 leaves the parties free to determine a certain
issue, such freedom includes the right of the parties to authorize a third party including an
institution to make that determination.
6. Where a provision of this Act refers to the fact that the parties have agreed or that they may
agree or in any other way refer to an agreement of the parties, such agreement includes any
arbitration rules referred to in that agreement.
7. Where a provision of this Act, other than sections 26 and 33(2)(a), refers to a claim, it also
applies to a counterclaim, and where it refers to a defence it also applies to a defence to such
counterclaim.
ii. International Arbitration

On the other hand an arbitration is international if it meets any of the following
factors
a) The parties have at the time of conclusion of that agreement their
places of business in different states.
b) One of the following places is situated outside the state in which the
parties have their places of business-
i. The place of arbitration if determined in or pursuant to the
arbitration agreement
ii. Any place where a substantial part of the obligation of the
commercial relationship is to be performed or the place with
which the subject matter of the dispute is closely connected.
c) The parties have expressly agreed that the subject matter of the
arbitration agreement relates to more than one country.(See Section 3
(3) of the Act)
2. Fundamental Principles
A number of key principles underlie the 1995 Act these are:
a) Party Autonomy
The principle of party autonomy is a fundamental basis of the model law this is
because arbitration is a consensual process i.e parties agree to refer to their
disputes to arbitration and once referred to arbitration they retain significant
control over the conduct of the proceedings.
In the Act the principle of party autonomy is underscored by the following
provisions
i. Section 29 (1)-Allowing the parties to agree on the applicable law.
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29. Rules applicable to substance of dispute

1. The arbitral tribunal shall decide the dispute in accordance with the rules of law chosen by the
parties as applicable to the substance of the dispute.
2. The choice of the law or legal system of any designated state shall be construed, unless
otherwise agreed by the parties, as directly referring to the substantive law of that state and not
to its conflict of laws rules.
3. Failing a choice of the law under subsection (1) by the parties, the arbitral tribunal shall apply
the rules of law it considers to be appropriate given all the circumstances of the dispute.
4. The arbitral tribunal shall decide on the substance of the dispute according to considerations of
justice and fairness without being bound by the rules of law, only if the parties have expressly
authorized it to do so.
5. In all cases, the arbitral tribunal shall decide in accordance with the terms of the particular
contract and shall take into account the usages of the trade applicable to the particular
transaction.
ii. Section 20 (1)- Allowing the parties to agree on the procedure to be

followed by the arbitral tribunal in the conduct of the arbitral
proceeding. But where parties are unable to agree on the procedure in
order to promote the principle of speedy resolution of disputes the Act
does however designate the arbitrator as ‘master of procedure’. See
Section 20 (2).
20. Determination of rules of procedure

1. Subject to the provisions of this Act, the parties are free to agree on the procedure to be
followed by the arbitral tribunal in the conduct of the proceedings.
2. Failing an agreement under subsection (1), the arbitral tribunal may conduct the arbitration in
the manner it considers appropriate, having regard to the desirability of avoiding unnecessary
delay or expense while at the same time affording the parties a fair and reasonable opportunity
to present their cases.
3. The power of the arbitral tribunal under subsection (2) includes the power to determine the
admissibility, relevance, materiality and weight of any evidence and to determine at what point
an argument or submission in respect of any matter has been fairly and adequately put or made.
4. Every witness giving evidence and every person appearing before an arbitral tribunal shall have
at least the same privileges and immunities as witnesses and advocates in proceedings before a
court.
5. The tribunal may direct that a party or witness shall be examined on oath or affirmation and
may for that purpose administer or take the necessary oath or affirmation.
iii. Section 25 (1)-Allowing the parties to agree on the manner in which the
dispute is to be heard i.e. parties may elect to have ‘documents only ‘
arbitration or have full oral hearing etc
25. Hearing and written representations

1. Subject to any agreement to the contrary by the hearing parties, the arbitral tribunal shall
decide whether to hold oral hearing for the presentation of evidence or for oral argument, or
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whether the proceedings shall be conducted on the basis of documents and other materials
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2. Unless the parties have agreed that no hearings shall be held, the arbitral tribunal shall hold oral
hearings at an appropriate stage of the proceedings, if so required by a party.
3. The parties shall be given sufficient advance notice of any hearing and of any meeting of the
arbitral tribunal for the purpose of inspection of documents, goods or other property
4. All statements, documents or other information furnished to, or applications made to, the
arbitral tribunal by one party shall be communicated to the other party, and any expert report
or evidential document on which the arbitral tribunal may rely in making its decisions shall be
communicated to the parties.
5. At any hearing or meeting of the arbitral tribunal of which notice is required to be given under
subsection (3), or in any proceedings conducted on the basis of documents or other materials,
the parties may appear or act in person or may be represented by any other person of their
choice.
iv. Section 12 – Allow the parties to appoint the arbitral tribunal
12. Appointment of arbitrators

1. No person shall be precluded by reason of that person’s nationality from acting as an arbitrator,
unless otherwise agreed by the parties.
2. The parties are free to agree on a procedure of appointing the arbitrator or arbitrators and any
chairman and failing such agreement—
a) in an arbitration with three arbitrators, each party shall appoint one arbitrator and the
two arbitrators so appointed shall appoint the arbitrator;
b) in an arbitration with two arbitrators, each party shall appoint one arbitrator; and
c) in an arbitration with one arbitrator, the parties shall agree on the arbitrator to be
appointed.
3. Unless the parties otherwise agree, where each of two parties to an arbitration agreement is to
appoint an arbitrator and one party (“the party in default”)—
a) has indicated that he is unwilling to do so;
b) fails to do so within the time allowed under the arbitration agreement; or
c) fails to do so within fourteen days (where the arbitration agreement does not limit the
time within which an arbitrator must be appointed by a party),the other party, having
duly appointed an arbitrator, may give notice in writing to the party in default that he
proposes to appoint his arbitrator to act as sole arbitrator.
4. If the party in default does not, within fourteen days after notice under subsection (3) has been
given—
a) make the required appointment; and
b) notify the other party that he has done so, the other party may appoint his arbitrator as sole
arbitrator, and the award of that arbitrator shall be binding on both parties as if he had been
so appointed by agreement.
5. Where a sole arbitrator has been appointed under subsection (4), the party in default may, upon
notice to the other party, apply to the High Court within fourteen days to have the appointment
set aside.
6. The High Court may grant an application under subsection (5) only if it is satisfied that there was
good cause for the failure or refusal of the party in default to appoint his arbitrator in due time.
7. The High Court, if it grants an application under subsection (5), may, by consent of the parties or
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on the application of either party, appoint a sole arbitrator.

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subject to appeal.
9. The High Court in appointing an arbitrator shall have due regard to any qualifications required of
an arbitrator by the agreement of the parties and to such considerations as are likely to secure
the appointment of an independent and impartial arbitrator and, in the case of a sole or third
arbitrator, shall take into account the advisability of appointing an arbitrator of a nationality
other than those of the parties.
v. Section 21 – Allow the parties to determine the seat of arbitration.
21. Place of arbitration

1. The parties are free to agree on the juridical seat of arbitration and the location of any hearing
or meeting.
2. Failing an agreement under subsection (1), the place of arbitration shall be determined by the
arbitral tribunal having regard to the circumstances of the case and convenience of the parties.
3. Notwithstanding subsection (1) the arbitral tribunal may, unless otherwise agreed by the
parties, meet at any location it considers appropriate for consultation among its members, for
hearing witnesses, experts or the parties, or for the inspection of documents, goods or other
property.
vi. Section 23 – Allow the parties to choose the language of the arbitral
process.
23. Language
1. The parties are free to agree upon the language or languages to be used in the arbitral
proceedings.
2. Failing an agreement under subsection (1), the arbitral tribunal shall determine the language or
languages to be used in the arbitral proceedings.
3. The agreement or determination under subsection (1) or (2) shall, unless otherwise specified,
apply to any written statement by a party, any hearing and any arbitral award, decision or other
communication by the arbitral tribunal.
4. The arbitral tribunal may order that any documentary evidence shall be accompanied by a
translation into the language or languages agreed upon by the parties or determined by the
arbitral tribunal.
vii. Section 32 (3)- Allow the parties to determine the form of award.
32. Form and contents of arbitral award

1. An arbitral award shall be made in writing and shall be signed by the arbitrator or the
arbitrators.
2. For the purposes of subsection (1), in arbitral proceedings with more than one arbitrator, the
signatures of the majority of all the arbitrators shall be sufficient so long as the reasons for any
omitted signature are stated.
3. The arbitral award shall state the reasons upon which it is based, unless—
a) the parties have agreed that no reasons are to be given; or
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b) the award is an arbitral award on agreed terms under section 31.

4. The arbitral award shall state the date of the award and the juridical seat of arbitration as
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made at that juridical seat.

5. Subject to section 32B after the arbitral award is made, a signed copy shall be delivered to each
party.
6. An arbitral tribunal may, at any time, make a partial award by which some, but not all, of the
issues between the parties are determined, and the provisions of this Act applying to awards of
an arbitral tribunal shall, except in so far as a contrary intention appears, apply in respect of
such partial award.
b) Non Intervention By Court

As mentioned earlier one of the significant improvements on the 1968 Act was
the codification of the principle of non-intervention by the court in the arbitral
proceeding.
This done vide Section 10 of the Act- This limitation means that parties may
only apply to the court where there is provision in the 1995 Act to do so.
10. Extent of court intervention

Except as provided in this Act, no court shall intervene in matters governed by this Act.
c) Kompetenz Kompetenz
Section 17 of the Act provides for the adoption of the principle of Kompetenz
Kompetenz
This principle provides that the arbitral tribunal may rule on its own jurisdiction,
including ruling on any objections with respect to the existence or validity of the
arbitration agreement.
Although subject to appeal this provision ensures that less time is wasted in
applications to the court on questions of jurisdiction.
17. Competence of arbitral tribunal to rule on its jurisdiction

1. The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with
respect to the existence or validity of the arbitration agreement, and for that purpose—
a) an arbitration clause which forms part of a contract shall be treated as an agreement
independent of the other terms of the contract; and
b) a decision by the arbitral tribunal that the contract is null and void shall not itself
invalidate the arbitration clause.
2. A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the
submission of the statement of defence, however, a party is not precluded from raising such a
plea because he has appointed, or participated in the appointment of, an arbitrator.
3. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as
the matter alleged to be beyond the scope of its authority is raised during the arbitral
proceedings.
4. The arbitral tribunal may, in either of the cases referred to in subsection (2) or (3) admit a later
plea if it considers the delay justified.
5. The arbitral tribunal may rule on a plea referred to in subsections (2) and (3) either as a
preliminary question or in an arbitration award on the merits.
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6. Where the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party
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notice of that ruling, to decide the matter.

7. The decision of the High Court shall be final and shall not be subject to appeal.
8. While an application under subsection (6) is pending before the High Court the parties may
commence, continue and conclude arbitral proceedings, but no award in such proceedings shall
take effect until the application is decided and such award shall be void if the application is
successful.
d) Neutrality and Equality

Provisions on the participation of both parties in the appointment of an
arbitrator promote the principle of neutrality and equality in the conduct of the
arbitral proceedings
Section 13 (1) of the Act provides that a person is approached in connection
with his possible appointment as an arbitrator must disclose any circumstances
likely to give rise to justifiable doubts as to his impartiality or independence.
And this obligation continues through out the arbitral proceedings. (See Section
13 (2) of the Act).
13. Grounds for challenge

1. When a person is approached in connection with his possible appointment as an arbitrator, he
shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or
independence.
2. From the time of his appointment and throughout the arbitral proceedings, an arbitrator shall
without delay discloses any such circumstances to the parties unless the parties have already
been informed of them by him.
3. An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as
to his impartiality and independence, or if he does not possess qualifications agreed to by the
parties or if he is physically or mentally incapable of conducting the proceedings or there are
justifiable doubts as to his capacity to do so.
4. A party may challenge an arbitrator appointed by him, or in whose appointment that party has
participated, only for reasons of which he becomes aware after the appointment.
If the circumstances arise that affect the impartiality or independence of an

arbitrator during the pendency of the arbitral proceedings the arbitrator must
disclose them to the parties.
Where neutrality is suspect, parties may challenge the appointment of the
arbitrator.(See Section 14 of the Act).
14. Challenge procedure

1. Subject to subsection (3), the parties are free to agree on a procedure for challenging an
arbitrator.
2. Failing an agreement under subsection (1), a party who intends to challenge an arbitrator shall,
within 15 days after becoming aware of the composition of the arbitral tribunal or after
becoming aware of any circumstances referred to in section 13(3), send a written statement of
the reasons for the challenge to the arbitral tribunal, and unless the arbitrator who is being
challenged withdraws from his office or the other party agrees to the challenge, the arbitral
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tribunal shall decide on the challenge.

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party may, within 30 days after being notified of the decision to reject the challenge, apply to
the High Court to determine the matter.
4. On an application under subsection (3), the arbitrator who was challenged shall be entitled to
appear and be heard before the High Court determines the application.
5. The High Court may confirm the rejection of the challenge or may uphold the challenge and
remove the arbitrator.
6. The decision of the High Court on such an application shall be final and shall not be subject to
appeal.
7. Where an arbitrator is removed by the High Court under this section, the court may make such
order as it thinks fit with respect to his entitlement (if any) to fees or expenses or the repayment
of any fees or expenses already paid.
8. While an application under subsection (3) is pending before the High Court, the parties may
take effect until the application is decided, and such an award shall be void if the application is
successful.
The arbitral tribunal is also obliged to treat the parties with equality and give
each party a fair and reasonable opportunity of presenting its case.(See Section
19 of the Act).
19. Equal treatment of parties

The parties shall be treated with equality and each party shall subject to section 20, be given a fair and
reasonable opportunity to present his case.
e) Flexibility
Section 24 (1) and (3) Parties are for instances able to agree on the time within
which pleadings are to be filed or amended unlike court proceedings where the
time is fixed by the Civil Procedure Rules.
24. Statement of claim and defence

1. Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the
claimant shall state the facts supporting his claim, the points at issue and the relief or remedy
sought, and the respondent shall state his defence in respect of these particulars, unless the
parties have otherwise agreed as to the required particulars of such statements.
2. The parties may submit with their statements all documents they consider to be relevant or may
add a reference to the documents or other evidence they will submit.
3. Except as otherwise agreed by the parties, either party may amend or supplement his claim or
defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it
inappropriate to allow the amendment or supplement having regard to the delay in making it.
Pleadings may also take different forms such as letters and what is referred to
as statement of case (refers to pleadings which evidence is annexed)
For more technical disputes parties may opt to put their cases in narrative form
and attach all the documents they will rely on to prove their case.
Parties may also agree where appropriate to have the dispute decided on
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documents, this is known as “document only arbitration”. (See Section 25 (1)

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25. Hearing and written representations

1. Subject to any agreement to the contrary by the hearing parties, the arbitral tribunal shall
decide whether to hold oral hearing for the presentation of evidence or for oral argument, or
whether the proceedings shall be conducted on the basis of documents and other materials
furnished under section 24.
2. Unless the parties have agreed that no hearings shall be held, the arbitral tribunal shall hold oral
hearings at an appropriate stage of the proceedings, if so required by a party.
3. The parties shall be given sufficient advance notice of any hearing and of any meeting of the
arbitral tribunal for the purpose of inspection of documents, goods or other property
4. All statements, documents or other information furnished to, or applications made to, the
arbitral tribunal by one party shall be communicated to the other party, and any expert report
or evidential document on which the arbitral tribunal may rely in making its decisions shall be
communicated to the parties.
5. At any hearing or meeting of the arbitral tribunal of which notice is required to be given under
subsection (3), or in any proceedings conducted on the basis of documents or other materials,
the parties may appear or act in person or may be represented by any other person of their
choice.
f) Finality of Award
An award is final and binding upon the parties (See Section 32 A of the Act).
Further the Act provides that parties may reserve a right of appeal only on
questions of law (See Section 39 of the Act).
Also the grounds for challenging the award have been greatly narrowed. (See
Section 35 of the Act).
32A. Effect of award

Except as otherwise agreed by the parties, an arbitral award is final and binding upon the parties to it,
and no recourse is available against the award otherwise than in the manner provided by this Act.
39. Questions of law arising in domestic arbitration

1. Where in the case of a domestic arbitration, the parties have agreed that—
a) an application by any party may be made to a court to determine any question of law
arising in the course of the arbitration; or
b) an appeal by any party may be made to a court on any question of law arising out of the
award, such application or appeal, as the case may be, may be made to the High Court.
2. On an application or appeal being made to it under subsection (1) the High Court shall—
a) determine the question of law arising;
b) confirm, vary or set aside the arbitral award or remit the matter to the arbitral tribunal for
re-consideration or, where another arbitral tribunal has been appointed, to that arbitral
tribunal for consideration.
3. Notwithstanding sections 10 and 35 an appeal shall lie to the Court of Appeal against a decision
of the High Court under subsection (2)—
a) if the parties have so agreed that an appeal shall lie prior to the delivery of the arbitral
award; or
b) the Court of Appeal, being of the opinion that a point of law of general importance is
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involved the determination of which will substantially affect the rights of one or more of the
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the powers which the High Court could have exercised under subsection (2).
4. An application or appeal under this section shall be made within the time limit and in the
manner prescribed by the Rules of Court applicable, as the case may be, in the High Court or the
Court of Appeal.
5. When an arbitral award has been varied on appeal under this section, the award so varied shall
have effect as if it were the award of the arbitral tribunal concerned.
35. Application for setting aside arbitral award
1. Recourse to the High Court against an arbitral award may be made only by an application for
setting aside the award under subsections (2) and (3).
2. An arbitral award may be set aside by the High Court only if—
a) the party making the application furnishes proof—
i. that a party to the arbitration agreement was under some incapacity; or
ii. the arbitration agreement is not valid under the law to which the parties have subjected
it or, failing any indication of that law, the laws of Kenya; or
iii. the party making the application was not given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
iv. the arbitral award deals with a dispute not contemplated by or not falling within the
terms of the reference to arbitration or contains decisions on matters beyond the scope
of the reference to arbitration, provided that if the decisions on matters referred to
arbitration can be separated from those not so referred, only that part of the arbitral
award which contains decisions on matters not referred to arbitration may be set aside;
or
v. the composition of the arbitral tribunal or the arbitral procedure was not in accordance
with the agreement of the parties, unless that agreement was in conflict with a
provision of this Act from which the parties cannot derogate; or failing such agreement,
was not in accordance with this Act; or
vi. the making of the award was induced or affected by fraud, bribery, undue influence or
corruption;
b) the High Court finds that—
i. the subject-matter of the dispute is not capable of settlement by arbitration under the
law of Kenya; or
ii. the award is in conflict with the public policy of Kenya.
3. An application for setting aside the arbitral award may not be made after 3 months have
elapsed from the date on which the party making that application had received the arbitral
award, or if a request had been made under section 34 from the date on which that request had
been disposed of by the arbitral award.
4. The High Court, when required to set aside an arbitral award, may, where appropriate and if so
requested by a party suspend the proceedings to set aside the arbitral award for such period of
time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in the opinion of the arbitral tribunal will eliminate
the grounds for setting aside the arbitral award.
g) Enforceability
Arbitration awards would be useful only if they are enforceable
Under the 1995 Act, The High Court of Kenya will recognize an award for
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37. Grounds for refusal of recognition or enforcement

1. The recognition or enforcement of an arbitral award, irrespective of the state in which it was
made, may be refused only—
a) at the request of the party against whom it is invoked, if that party furnishes to the High
Court proof that—
i. a party to the arbitration agreement was under some incapacity; or
ii. the arbitration agreement is not valid under the law to which the parties have
subjected it or, failing any indication of that law, under the law of the state
where the arbitral award was made;
iii. the party against whom the arbitral award is invoked was not given proper
notice of the appointment of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or
iv. the arbitral award deals with a dispute not contemplated by or not falling within
the terms of the reference to arbitration, or it contains decisions on matters
beyond the scope of the reference to arbitration, provided that if the decisions
on matters referred to arbitration can be separated from those not so referred,
that part of the arbitral award which contains decisions on matters referred to
arbitration may be recognized and enforced; or
v. the composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties or, failing any agreement by the
parties, was not in accordance with the law of the state where the arbitration
took place; or
vi. the arbitral award has not yet become binding on the parties or has been set
aside or suspended by a court of the state in which, or under the law of which,
that arbitral award was made; or
vii. the making of the arbitral award was induced or affected by fraud, bribery,
corruption or undue influence or
b) if the High Court finds that—
i. the subject-matter of the dispute is not capable of settlement by arbitration
under the law of Kenya; or
ii. the recognition or enforcement of the arbitral award would be contrary to the
public policy of Kenya.
2. If an application for the setting aside or suspension of an arbitral award has been made to a
court referred to in subsection (1)(a)(vi), the High Court may, if it considers it proper, adjourn its
decision and may also, on the application of the party, claiming recognition or enforcement of
the arbitral award, order the other party to provide appropriate security.
3. Rules Under The Arbitration Act, 1995

The Act is not exhaustive in terms of procedure hence Section 40 of the Act empowers the Chief
Justice to make court procedural rules on matters not prescribed in the Act including
a) recognition and enforcement of arbitral awards
b) Setting aside of the award
c) Stay of proceedings
d) And generally any proceedings in court under the Arbitration Act.
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40. Rules
The Chief Justice may make rules of Court for—
a) the recognition and enforcement of arbitral awards and all proceedings consequent thereon or
incidental thereto;
b) the filing of applications for setting aside arbitral awards;
c) the staying of any suit or proceedings instituted in contravention of an arbitration agreement;
d) generally all proceedings in court under this Act.
Hence in exercise of the powers in Section 40 we do have the Arbitration Rules 1997.
The rules also give room for application of Civil Procedure Rules to be applicable under the Act.
THE 2009 AMENDMENTS TO THE 1995 ACT

The following improvements were done on the 1995 Act
1. There was no provision for the finality of the Arbitral Award now Section 32A expressly provides
for the Awards to be final and binding on parties save for where otherwise agreed, this is also a
nod to the principle of party autonomy in arbitral proceedings.

2. The immunity of the Arbitrator was not statutorily provided for hence section 16B now
expressly provides for the immunity of an arbitrator who acts in good faith.
16B. Immunity of arbitrator

1. An arbitrator shall not be liable for anything done or omitted to be done in good faith in the
discharge or purported discharge of his functions as an arbitrator.
2. Subsection (1) shall extend to apply to a servant or agent of an arbitrator in respect of the
discharge or purported discharge by such a servant or agent, with due authority and in good
faith, of the functions of the arbitrator.
3. Nothing in this section affects any liability incurred by an arbitrator by reason of his resignation
or withdrawal.
3. The issues of costs, expenses and interests were not sufficiently addressed. See Section 32 B
and 32 C where this has been addressed.
32B. Costs and expenses

1. Unless otherwise agreed by the parties, the costs and expenses of an arbitration, being the legal
and other expenses of the parties, the fees and expenses of the arbitral tribunal and any other
expenses related to the arbitration, shall be as determined and apportioned by the arbitral
tribunal in its award under this section, or any additional award under section 34(5).
2. Unless otherwise agreed by the parties, in the absence of an award or additional award
determining and apportioning the costs and expenses of the arbitration, each party shall be
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responsible for the legal and other expenses of that party and for an equal share of the fees and
expenses of the arbitral tribunal and any other expenses relating to the arbitration.
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the fees and expenses of the arbitral tribunal is received.

4. If the arbitral tribunal has, under subsection (3), withheld the delivery of an award, a party to
the arbitration may, upon notice to the other party and to the arbitral tribunal, and after
payment into court of the fees and expenses demanded by the arbitral tribunal, apply to the
High Court for an order directing the manner in which the fees and expenses properly payable
to the arbitral tribunal shall be determined.
5. The fees and expenses found to be properly payable pursuant to such an order shall be paid out
of the moneys paid into court and the balance of those moneys. if any, shall be refunded to the
applicant.
6. The decision of the High Court on an application under subsection (4) shall be final and not
subject to appeal.
7. The provisions of subsections (3) to (6) have effect notwithstanding any agreement to the
contrary made between the parties.
32C. Interest
Unless otherwise agreed by the parties, to the extent that the rules of law applicable to the substance of
the dispute permit, an arbitral award may include provision for the payment of simple or compound
interest calculated from such date, at such rate and with such rests as may be specified in the award.
4. The parties were not under obligations to make the arbitral process work. See Section 19A
where the parties have a statutory duty to make the process expeditious.
19. Equal treatment of parties

The parties shall be treated with equality and each party shall subject to section 20, be given a fair and
reasonable opportunity to present his case.
5. The amendments also included recommendations of key stakeholders like Chartered Institute of
Arbitrators
INSTITUTIONAL REFERENCES TO ARBITRATION

Where parties are unable to agree on the appointment of an arbitrator the arbitration clause
will frequently provide for a third party usually the Chairman of a professional organization to
make such appointment.
The Chartered Institute of Arbitrators (Kenya) Branch is one of the most recognized institutions
in arbitration in Kenya.
COURT SUPERVISED ARBITRATION UNDER ORDER 46 OF THE CIVIL PROCEDURE RULES, CIVIL
PROCEDURE ACT
Arbitration may also be conducted under order of the Court (See Section 59 of the Civil
Procedure Act)
Order 46 Rule 1 of the Civil Procedure Rules 2010 provides that where the parties agree to refer
their suit to arbitration they may at any time before the judgment is pronounced apply to court
for an order of reference.
Court ordered Arbitration gives the court more room for intervention than provided for in the
Arbitration Act e.g
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a) The court must fix the time within which the arbitral award must be made
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Al though Order 46 Rule 3 (2) provides for some sort of limitation of the courts
intervention
Arbitration under the court order removes the cloak of confidentiality. See Order 46 Rule 10
where the award must be filed in court and read by the registrar (See Order 46 Rule 11)
ENFORCEMENT UNDER THE NEWYORK CONVENTION

The rapid growth in International Commerce inevitably meant that international commercial
arbitrators would require international award enforcement mechanisms.
That mechanism to the form of the 1958 Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (The New York Convention).
The NY Convention seeks to provide common legislative standards for the recognition of
arbitration agreements and court recognition and enforcement of foreign arbitral awards.
Kenya ratified the convention in 10th Feb 1989 with some reservation on reciprocity.
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THE ARBITRATION AGREEMENT-BY KYALO MBOBU
The foundation of every arbitration is an agreement to refer the matter to arbitration.

Typically it usually takes the form of clause in the contract between the parties.
If there is no express provisions in the contract, when a dispute has arisen is to draw up one also
referred to as a submission agreement.
1. THE ARBITRATION AGREEMENT
Section 3 of the Arbitration Act defines an arbitration agreement as “an agreement by the
parties to submit to arbitration all or certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship whether contractual or not”.
The thrust of such an agreement is the contractual undertaking by the parties to resolve
disputes by the process of arbitration, the dispute itself need not be based on a contractual
relationship.
Form of Agreement
Section 4 (2) of the Act requires an arbitration agreement to be “in writing “for it to have effect.
This requirement is satisfied is an arbitration agreement is contained in:
a) A document signed by the parties.
b) An exchange of letters, telex, telegram, fax, e-mail or other telecommunication method
which provide a record of the agreement.
c) An exchange of statements of claim and defense in which the existence of an agreement
is alleged by one of the party and denied by the other.
However it is not necessary that an arbitration agreement be a formal agreement or that all the
terms be contained in one document.
Section 4 (4) of the Act provides that the reference in a contract to a document containing the
arbitration clause shall constitute an arbitration agreement if the contract is in writing and the
reference is such as to make that arbitration part of the contract.
4. Form of arbitration agreement

1. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form
of a separate agreement.
2. An arbitration agreement shall be in writing.
3. An arbitration agreement is in writing if it is contained in—
a) a document signed by the parties;
b) an exchange of letters, telex, telegram, facsimile, electronic mail or other means of
telecommunications which provide a record of the agreement; or
c) an exchange of statements of claim and defence in which the existence of an agreement
is alleged by one party and not denied by the other party.
4. The reference in a contract to a document containing an arbitration clause shall constitute an
arbitration agreement if the contract is in writing and the reference is such as to make that
arbitration clause part of the contract.
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2. MODEL ARBITRATION AGREEMENT
The provisions of the Arbitration Act allow parties to make the arbitration agreement inclusive
as possible. However when drafting the arbitration agreement it must be done within the
confines of necessary public interest. The award may be set aside on the grounds that the
arbitration agreement is contrary to public interest.
However the standard Arbitration agreement should at least provide for the following:
i. Disputes to be resolved by arbitration

From the wording of the agreement it will be clear what disputes are referred to
arbitration.
The wording should be elaborate.
See Gunter Henck vs. Andre and Cie SA [1970] Vol 1 Lloyds Rep 235
CASE
Gunter Henck vs. Andre and Cie SA [1970] Vol 1 Lloyds Rep 235
The arbitration agreement was worded inter alia that “ all disputes from time to time arising out of or
under this contract” Mocatta J held that the words arising out of the contract extended the meaning
that would have otherwise been limited to disputes arising out of the contract
It is recommended that it is best to draft arbitration agreements to cover future

as well as unknown disputes, in the widest possible terms. See Government of
Gilbratar vs. Kenney
CASE
Government of Gilbratar vs. Kenney
It was held that the terms were wide in scope “Any dispute or difference which arises or occurs between
the parties in relation to any thing or matter arises out of or under this agreement”.
ii. The disputants must be clearly identified.

It is important to identify the parties who may arbitrate pursuant to an
Parties may not be substituted without their consent or reference.
Instituting proceedings against the wrong party or substituting is fatal.
See Kenya Railways vs. Antares Co Plc Ltd (“The Antares”) 1987 1 Lloyds Rep
424
CASE
Kenya Railways vs. Antares Co Plc Ltd (“The Antares”) 1987 1 Lloyds Rep 424
Lord Justice Lloyds in dismissing the appeal stated inter alia that “It would be contrary to the whole
consensual basis of arbitration if the Court were to have power to add or substitute a party to an
existing arbitration. There must be a clear reference to the arbitration parties”.
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iii. Venue of the arbitration

Parties are free to determine the venue of the proceedings.(See Section 21 of
the Act)
The choice of venue is important because it determines the applicable law and
the procedures to be followed and conduct of the arbitration.
Where the parties do not choice the venue the arbitrator is mandated to make
the choice of the venue.

or meeting.
property.
iv. Applicable law

This must be indicated in the agreement where parties intended to rely on
specific statutes
See Swiss Bank Corporation vs. Novorissysk Shipping Co [1995 Lloyds Rep 64]
Swiss Bank Corporation vs. Novorissysk Shipping Co [1995 Lloyds Rep 64]
A clause which simply stated “Arbitration in London” was construed to mean that the English Law would
apply.
v. Procedure during arbitration

Section 20 of the Act provides that the parties are free to provide for the
procedure to be followed.
Where the parties fail to agree on the procedure the arbitrator is mandated to
choose the procedure to be used. He becomes the “master of procedure”.(See
Section 20 (2))

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court.
vi. Number of arbitrators

Parties are free to agree on the number of arbitrators failing which there is one
arbitrator. See Section 11 of the Act.
Where parties fail to agree on appointment of an arbitrator the mode of
appointing is provided for in Section 12 of the Act.
11. Determination of number of arbitrators

1. The parties are free to determine the number of arbitrators.
2. Failing such determination, the number of arbitrators shall be one.
3. Where an arbitration agreement provides that the reference shall be to two arbitrators, then,
unless a contrary intention is expressed in the agreement, the agreement is deemed to include a
provision that the two arbitrators shall appoint a third arbitrator immediately after they are
themselves appointed.
12. Appointment of arbitrators
appointed.
time within which an arbitrator must be appointed by a party),the other party, having
given—
arbitrator, and the award of that arbitrator shall be binding on both parties as if he had been
so appointed by agreement.
set aside.
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subject to appeal.
9. The High Court in appointing an arbitrator shall have due regard to any qualifications required of
However where the arbitration agreement is clear on the mode of appointment

of the arbitrator there is little or no interference from the court.See Kenya Oil
Company Limited and Another vs. Kenya Petroleum Refineries [2010 eKLR]
CASE
Kenya Oil Company Limited and Another vs Kenya Petroleum Refineries [2010 eKLR]
Lady Justice Koome held that the court will not order the appointment of an arbitrator or termination of
the arbitration where it is elaborately provided for in the arbitration agreement.
Where a suit is instituted pursuant to the Civil Procedure Act parties may agree
to appoint an arbitrator pursuant to the provisions of Order 46 Rule 2 of the
Civil Procedure Rules 2010.
vii. Limitation period of dispute resolution

The arbitration agreement may indicate the limitation period for instituting
arbitral proceedings.
Arbitral proceedings are bound by the Limitation Statute. See Telkom Kenya
Limited vs. Kamconsult Limited Unreported 2001
CASE
Telkom Kenya Limited vs Kamconsult Limited Unreported 2001
Justice Ringera (as he was then) held that arbitrator did not have jurisdiction to handle a claim that is
statute barred.
See also Kenya Railways vs. Antares Co Plc Ltd (“The Antares”) 1987 1 Lloyds Rep 424
Where the court held that the tribunal has no jurisdiction to entertain disputes that are time barred.
It is important to note that the arbitration award is likely to be set aside on

grounds of public policy if the claim is time-barred.
viii. Costs
The costs in arbitration unlike the court process can be agreed upon by the
parties in the arbitration agreement.
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ix. Appeals
Finally if parties wish to reserve a right of appeal (Under Section 39 of the Act) it
is important that this is expressly captured in the agreement.
Where the parties fail to agree the decision of the arbitrator is final but may be
challenged in the High Court pursuant to Section 35 of the Act.
DOCTRINE OF SEPARABILITY
An arbitration agreement is separate from the main contract in which it is contained. This means
that the arbitration clause in a contract survives the termination of the contract.
This concept was illustrated many years ago in the case of Heyman vs. Darwin [1942] A.C 356
CASE
Heyman vs. Darwin [1942] A.C 356
The court observed “It survives for the purpose of measuring the claims arising out of the breach, and
the arbitration clause survives for determination the mode of their settlement .The purposes of the
contract have failed but the arbitration clause is not one of the purposes of the contract”.
In a leading case of the Union of India vs. McDonnel Douglas Corporation [1992]Lloyd 48
CASE
Union of India vs. McDonnel Douglas Corporation [1992]Lloyd 48
Saville J noted “An arbitration clause in a commercial contract….is an agreement inside an agreement.
The parties make their commercial bargain but in addition agree on a private tribunal to resolve any
issues that may arise”.
This concept is captured at section 17 (1) of the Act where it is provided that
a) An arbitration clause which forms part of a contract shall be treated as an independent
agreement of the other terms of the contract and
b) A decision of the arbitral tribunal that the contract is null and void shall not itself

b) a decision by the arbitral tribunal that the contract is null and void shall not itself
proceedings.
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successful.
See Glaxosmithkline vs Department of Health [2007] EWAC 1470
CASE
GlaxoSmithKline vs. Department of Health [2007] EWAC 1470
So broad is the concept that it was accepted in this case,that even if the underlying contract never came
into existence, the arbitration agreement may still be binding .In this case it was alleged that the plaintiff
entered into a purely non-binding and voluntary agreement with no intention to create legal relations.
The arbitration agreement it was alleged was no more binding than the larger contract of which it
formed part. The court found that there was no agreement between the parties that the award should
not be final and binding effectively holding that the resultant award was binding and enforceable.
The doctrine underscores the breadth of an arbitration agreement because it establishes that
arbitration has a separate life of its own from the underlying contract for which it provides the
means of resolving disputes.
Therefore even if the underlying contract is terminated e.g by repudiation or frustration, the
arbitration agreement continues to exist in order to deal with any disputes in respect of
liabilities under the material contract arising by or after the termination.
At times arbitration agreements become ineffective due to failure to distinguish between
different categories or types of disputes resolution mechanisms available.
4. VALIDITY OF ARBITRATION AGREEMENT
There is no arbitration unless both parties to a dispute have agreed to submit the matter to
arbitration.
Disputes relating to the existence and validity of the arbitration agreement are ideally resolved
at the initial stage of the arbitral process.
The question of the jurisdiction of hearing such disputes depends on the forum at which the
question first arises.
I. Firstly the tribunal has jurisdiction to interpret and resolve any issues raised as to the
validity of the agreement. Section 17 of the Act provides that the arbitral tribunal may
rule on its own jurisdiction. This includes ruling on any objections with respect to the
existence or validity of the arbitration agreement (Kompetenz-Kompetenz).At this point
the main concern for the tribunal is the issue of jurisdiction. See the case of Kenya Shell
Limited vs Kobil Petroleum Limited [2006] 2 EA 132 (CAK). In deciding the issue of
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jurisdiction it may be apparent that the arbitral tribunal interprets and considers the
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arbitration agreement is capable of being enforced exists. If the dispute is barred by

statute of limitation then the tribunal will not have jurisdiction to arbitrate. See Telkom
Kenya Limited and Another vs Kam Consult Limited
II. Secondly in view of Section 10 of the Act the court should not interfere with the matters
that are provided for in the Act. One school of thought is that the court has no
jurisdiction at all and therefore arbitration process should be as envisaged in the
agreement or as governed by the Act. The other school of thought is that the High Court
has unlimited original jurisdiction in civil and criminal matters (See Article 165 (3) of the
Constitution) and also Epco Builders Limited vs. Marjan Arbitrators and Another Civil
Appeal 248 of 2005.
Section 6 (i) of the Act provides that the court must before granting an order of stay,
satisfy itself that a valid agreement exists and the dispute is within the scope of the
arbitration agreement.Rusell for example argues that when a question arises as to
whether an arbitration agreement exists for the purpose of granting a stay of
proceeding the court will determine whether indeed an arbitration agreement exists.
The court in that case will only consider the question of existence of an arbitration
agreement and its validity (if indeed an agreement exists) is normally left to the
arbitrators.
6. Stay of legal proceedings

1. A court before which proceedings are brought in a matter which is the subject of an arbitration
agreement shall, if a party so applies not later than the time when that party enters appearance
or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the
proceedings and refer the parties to arbitration unless it finds—
a) that the arbitration agreement is null and void, inoperative or incapable of being
performed; or
b) that there is not in fact any dispute between the parties with regard to the matters
agreed to be referred to arbitration.
2. Proceedings before the court shall not be continued after an application under subsection (1)
has been made and the matter remains undetermined.
3. If the court declines to stay legal proceedings, any provision of the arbitration agreement to the
effect that an award is a condition precedent to the bringing of legal proceedings in respect of
any matter is of no effect in relation to those proceedings.
III. Thirdly the arbitration agreement is subject to the Limitation of Actions Act. Therefore
the tribunal has no jurisdiction when the claim is time-barred. Also when parties agree
on a limitation of time within which to make a reference then they are bound by their
agreement. See Barlany Car Hire Services Limited vs. Corporate Insurance [HCCC
Milimani No 1249 of 2000]
5. MANDATE OF TRIBUNAL AND COURT IN ENFORCING THE AGREEMENT

The arbitration agreement should be as broad as possible to enhance ease in enforceability.
The parties may agree on the nature which the agreement will be enforced.
The arbitral tribunal’s mandate is to enforce the agreement at all levels.
The court however should assists where there is need to do so. It does this through
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Section 6 of the Act provides that the court may stay proceedings and refer the
parties to arbitration.
For the court to stay proceedings the arbitration agreement must be null and
void.
Where one party has commenced proceedings in court in breach of the
arbitration agreement the other party can make application to court for stay of
proceedings brought in breach. In most cases the stay proceedings will bar the
suit and compel the party in breach to arbitrate.
The defendant must not enter appearance or file a defence before making an
application for stay of proceedings. See Peter Muema Kahoro and Another vs
Benson Maina Githechuki [2006] HCCC No.1295 of 2005.
CASE
Peter Muema Kahoro and Another vs. Benson Maina Githechuki [2006] HCCC No.1295 of 2005.
It was held that once appearance has been entered and a defence has been filed an application to stay
proceedings and refer the matter to arbitration may be a tactic for delay.
See also Niazsons (K) Limited vs. China Road and Bridge Corporation Ltd [2001]
KLR 12
CASE
Niazsons (K) Limited vs. China Road and Bridge Corporation Ltd [2001] KLR 12
The Court of Appeal held inter alia that as long as an application for stay of proceedings under Section 6
(1) of the Act is brought promptly the court is obliged to consider only three things
1. Firstly whether the applicant has taken any steps in the proceedings other than the steps
allowed by the section.
2. Secondly whether there are any legal impediments on the validity, operation or performance of
the arbitration agreement and
3. Thirdly whether the suit indeed concerned a matter agreed to be referred to arbitration
Bosire JA (As he was then) said “I think that once an application under Section 6 (1) of the Arbitration
Act has been made it is incumbent upon the judge seized of the matter to deal with it as a whole to
discover whether any of the legal impediments set out in the section exist to disentitle the application to
a stay.” The impediments may inter alia include whether there is a valid arbitration agreement whether
the dispute is within the scope of the arbitration agreement.
II. Interim Measures by Court

Section 7 of the Act empowers the court to grant interim orders to a party
before or during the arbitral proceedings as a measure of protection to that
party.
7. Interim measures by court

1. It is not incompatible with an arbitration agreement for a party to request from the High Court,
before or during arbitral proceedings, an interim measure of protection and for the High Court
to grant that measure.
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2. Where a party applies to the High Court for an injunction or other interim order and the arbitral
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the ruling or any finding of fact made in the course of the ruling as conclusive for the purposes
of the application.
In instances where it is important to preserve the assets that are subject to the
arbitral proceedings the court will grant an interim injunction to the party ,by so
doing the court is enforcing the agreement. See the following two cases.
CASE
Don-wood Co.Ltd vs Kenya Pipeline Ltd [HCCC No.104 of 2004] (Ojwang J)
The defendant had declined to arbitrate. The judge granted the orders and found that the jurisdiction to grant
injunctive relief under Section 7 of the Arbitration Act was intended to preserve the subject matter of the suit
pending determination of the issues between the parties in accordance with the agreement.
CASE
Mugoya Construction & Engineering Limited National Social Security Fund Board of Trustees &Another
[2005] eKLR
Ransley J (Following Ojwang J in Don wood) held inter alia that in order to succeed the applicant must show it
has a prima facie case with a probability of success pending the hearing and completion of the arbitration
proceedings.
III. Interim Orders of Protection Within The Arbitration Proceedings

The arbitral tribunal or a party with the approval of the arbitral tribunal or any
party may seek assistance from the High Court in exercise of any power
conferred on the arbitral tribunal under Section 18 (1) of the Act. This section
provides that any party may with the consent of the arbitral tribunal take such
interim measure of the protection as the arbitral tribunal may consider
necessary in respect of the subject-matter of the dispute.
18. Power of arbitral tribunal

1. Unless the parties otherwise agree, an arbitral tribunal may, on the application of a party—
a) order any party to take such interim measure of protection as the arbitral tribunal may
consider necessary in respect of the subject matter of the dispute, with or without an
ancillary order requiring the provision of appropriate security in connection with such a
measure; or
b) order any party to provide security in respect of any claim or any amount in dispute;
c) order a claimant to provide security for costs.
2. The arbitral tribunal or a party with the approval of the arbitral tribunal may seek assistance
from the High Court in the exercise of any power conferred on the arbitral tribunal under
subsection (1).
3. If a request is made under subsection (2) the High Court shall have, for the purposes of the
arbitral proceedings, the same power to make an order for the doing of anything which the
arbitral tribunal is empowered to order under subsection (1) as it would have in civil
proceedings before that Court, but the arbitral proceedings shall continue notwithstanding that
a request has been made and is being considered by the High Court.
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A party may also seek that the other provides security in order to protect the
property or the subject matter of the dispute pending hearing and
determination of the dispute.
This in effect means that the party seeks the assistance of the High Court which
has jurisdiction to enforce interim measures of protection .
Section 18 (3) –These measures do not bar the tribunal from proceeding with
the arbitration.
6. CHALLENGES IN ENFORCING THE ARBITRATION AGREEMENT.

The scope of an arbitration agreement is largely deduced from its construction.
Where there is a dispute relating to the scope of the agreement a broader
interpretation is preferred.
Under Section 29 of the Act the tribunal will not extend its jurisdiction unless allowed to
do so by the rules and procedure agreed upon by the parties.
29. Rules applicable to substance of dispute

1. The arbitral tribunal shall decide the dispute in accordance with the rules of law chosen by the
parties as applicable to the substance of the dispute.
2. The choice of the law or legal system of any designated state shall be construed, unless
otherwise agreed by the parties, as directly referring to the substantive law of that state and not
to its conflict of laws rules.
3. Failing a choice of the law under subsection (1) by the parties, the arbitral tribunal shall apply
the rules of law it considers to be appropriate given all the circumstances of the dispute.
4. The arbitral tribunal shall decide on the substance of the dispute according to considerations of
justice and fairness without being bound by the rules of law, only if the parties have expressly
authorized it to do so.
5. In all cases, the arbitral tribunal shall decide in accordance with the terms of the particular
contract and shall take into account the usages of the trade applicable to the particular
transaction.
Vide Section 17 of the Act the jurisdiction to determine the effect and interpretation of
the arbitration agreement lies with the arbitrators.
When parties opt to go to court in spite of the agreement to arbitrate they vacate the
arbitration agreement giving it no effect (See Kenya Shell Limited vs Kobil Petroleum
Limited (2006) 2 EA 132)
See Stellar Shipping Co LLC vs. Hudson Shipping Lines [2010] EWHC 2985 (Comm)
CASE
Stellar Shipping Co LLC vs. Hudson Shipping Lines [2010] EWHC 2985 (Comm)
There was a dispute as to whether an arbitration clause in a contract of affreightment extended also to a
separate guarantee given by a third party which formed a part of the contract of affreightment.Hamblen
J ruled that the arbitration clause, properly construed, applied to both agreements.
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CLASS NOTES
DRAFTING OF AN ARBITRATION CLAUSE
Section 4 (2) of the Arbitration Act requires that the Arbitration Agreement be in writing.
PART II-GENERAL PROVISONS

Form of arbitration agreement
1) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form
of a separate agreement.
2) An arbitration agreement shall be in writing.
3) An arbitration agreement is in writing if it is contained in—
a) a document signed by the parties;
b) an exchange of letters, telex, telegram, facsimile, electronic mail or other means of
telecommunications which provide a record of the agreement; or
c) an exchange of statements of claim and defence in which the existence of an agreement
is alleged by one party and not denied by the other party.
4) The reference in a contract to a document containing an arbitration clause shall constitute an
arbitration agreement if the contract is in writing and the reference is such as to make that
arbitration clause part of the contract. [Act No. 11 of 2009, s. 3.]
Section 4 (3) (a-c) of the Arbitration Act stipulates the requirements that are met if the
Arbitration Agreement is to be in writing and that is
a) It is contained in a document signed by the parties.
b) It is contained in an exchange of letters, telex, telegram, fax, e-mail or any other
telecommunication which provides a record of the agreement.
c) It is contained in an exchange of statement of claim and defence in which the
Arbitration agreement is alleged by one party and not denied by the other.
To have a legal effect the Arbitration Agreement must be in writing. See Ransley J in Pan African
Builders & Contractors Limited vs N.S.S.F Board of Trustees [2006] eKLR
CASE
Pan African Builders & Contractors Limited vs N.S.S.F Board of Trustees 2006 eKLR
The Arbitration Agreement Should Contain

1. What disputes should be referred to arbitration
2. Disputants should be clearly be defined
3. Vide Section 21 of the Arbitration Act- where the venue for the arbitration will be (It
should be convenient for both parties if possible)

or meeting.
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property.
4. Applicable Law especially if it is an International Arbitration /law. Also domestic contract

with elements of International trade law or international features.
5. Vide Section 20 of the Arbitration Act What is the procedure to be followed? There are
various methods and procedures e.g
i. Look and sniff
ii. Documents only
iii. Submissions
iv. Documents and submissions
v. Full hearing (oral) with discovery
vi. Expert Evidence
vii. Expert exchange of documents
viii. Or a full blown hearing.

court.
The procedure does not have to be an adversarial e.g when the dispute is a quality issue or
where the arbitrator is an expert, or when sending a sample is sufficient.
If the procedure is not agreed between the parties then vide section 20 (2) the Arbitral Tribunal
is free to choose a procedure taking into account desirability of avoiding unnecessary cost or
delay and at the same time affording the parties a fair and reasonable opportunity to present
their case.
The parties or Arbitral Tribunal can also reference to Institutional Rules (Chartered Institute of
Arbitration) etc to get the procedure.
The procedure will also include the procedure for appointment of the Arbitrators and the
Number of Arbitrators (The Default position is every party can chose one).Section 12 of the
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Arbitration Act stipulates the rules of Appointment of Arbitrators.

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12. Appointment of Arbitrators

appointed.
time within which an arbitrator must be appointed by a party), the other party, having
given—
b) notify the other party that he has done so, the other party may appoint his arbitrator as
sole arbitrator, and the award of that arbitrator shall be binding on both parties as if he
had been so appointed by agreement.
set aside.
subject to appeal.
The High Court in appointing an arbitrator shall have due regard to any qualifications required of
6. Limitation Period. See the case of Telkom Kenya Limited vs. Kam Consult Ltd [2001] 2
EA 574
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CASE
Telkom Kenya Limited vs. Kam Consult Ltd [2001] 2 EA 574
T brought a reference from an arbitrator’s decision pursuant to Section 17 of the Arbitration Act 4 of
1995 seeking an order that the arbitrator had no jurisdiction to hear a claim brought by K for breach of
contract. From 1988 to 1992 T had written letters of commission to various parties, including K,
awarding contracts for various aspects of a building project. The letters incorporated a document
entitled “Conditions of Engagement” which provided for arbitration in certain circumstances.T stopped
work on the projects in 1994.In 1996 more than one year later, K made its claims and subsequently
engaged T in correspondence.T subsequently acknowledged the claims and made part payment.
Subsequently K initiated arbitration proceedings to settle its claims.T objected to the jurisdiction of the
arbitrator on the grounds that the arbitration clause had not been incorporated into the agreement
between the parties, that the claim was statute barred and that it was tainted by fraud and therefore
outside the jurisdiction of the arbitrator.K applied that the acknowledgement of the debt and part
payment of the same had revived it. On reference from the arbitrator’s decision affirming jurisdiction,
the supplementary question of whether the agreement in question was contrary to statute for
exceeding the statutory powers of the Managing Director of Kenya Posts and Telecommunication (KPTC)
arose.
On the issue of Limitation of Time Ringera J (as he was then) stated that the arbitrator did not have
jurisdiction to handle a claim that is statute-barred. It is important to note that the arbitration award
can be set aside on grounds of public policy if the claim is time barred.
See also Kenya Railways vs. Antares Co.PLC Ltd (The Antares) 1987 1 Llyod’s Rep 424
CASE
Kenya Railways vs. Antares Co.PLC Ltd (The Antares) 1987 1 Llyod’s Rep 424
Where the court also held that the tribunal has no jurisdiction to entertain disputes that are time
barred.
7. Cost
8. Appeals
ARBITRABILITY (SUBJECT MATTER OF THE ARBITRATION AGREEMENT)

Arbitrability deals with the issue of what can be referred to arbitration and what can not.
The question of whether a particular dispute can be referred to arbitration (Arbitrability) should
not be confused with the question of what disputes fall within the terms of a particular
arbitration agreement (the scope of arbitration agreement).The latter is a matter of
interpretation of a particular arbitration clause.
The issue of arbitrability rarely comes up especially in jurisdictions with large number of
arbitration business such as UK because they deal with a huge range of different disputes
referred to them and the procedures adopted which inhibit any attempt to limit arbitrability at
least in the commercial field.
The issue of arbitrability can arise at three stages in an arbitration
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1. On application to stay the arbitration when the opposing party claims that the tribunal
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2. In the course of the arbitral proceedings on the hearing of an objection that the
tribunal lacks substantive jurisdiction
3. On application to challenge an award or oppose enforcement (e.g. New York
Convention for example refers to non-arbitrability as a ground for a court refusing to
recognize and enforce an award. See Article V (2) (a) permits enforcement to be
refused if the court finds that the subject of the difference is “not capable of
settlement by arbitration under the law of that country”.
In general the following matters are not arbitrable in many jurisdictions
i. Criminal Matters (But see Mohammed Abdow vs Republic)
ii. Patent Regulation (validity of trademarks and patents)
iii. Some times the issues of Bankruptcy
iv. Some matters of family law (child custody matters)
v. Matters that will have great impact on third parties.
vi. Matters that will have consequences on the public domain (Public Interest Cases)
vii. Human Rights issues
viii. Mandatory Provisions –The terms of arbitration agreement may be overridden in whole
or in part by mandatory provisions of the Law.(e.g. Section 88 of the Consumer
Protection Act 46 of 2012)
In Kenya however the Arbitration Act does not say what is arbitrable and what is not.
For example Section 37 of the Act which provides indirectly that enforcement of an award will
be refused if the subject matter of the dispute
i. Is not capable of settlement by Arbitration under the laws of Kenya.
ii. If the recognition and enforcement would be contrary to public policy in Kenya.
PART VII – RECOGNITION AND ENFORCEMENT OF AWARDS

Court proof that—
accordance with the agreement of the parties or, failing any agreement by the
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court referred to in subsection (1)(a)(vi), the High Court may, if it considers it proper, adjourn its
decision and may also, on the application of the party, claiming recognition or enforcement of
the arbitral award, order the other party to provide appropriate security.
Section 35 of the Act dealing with setting aside arbitral awards has similar provisions. Basically
the High court can set aside an award if the subject matter is one that is not capable of
settlement by arbitration under Kenyan law.
PART VI – RECOURSE TO HIGH COURT AGAINST ARBITRAL AWARD

subjected it or, failing any indication of that law, the laws of Kenya; or
iii. the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was otherwise
unable to present his case; or
the terms of the reference to arbitration or contains decisions on matters
only that part of the arbitral award which contains decisions on matters not
referred to arbitration may be set aside; or
accordance with the agreement of the parties, unless that agreement was in
conflict with a provision of this Act from which the parties cannot derogate; or
failing such agreement, was not in accordance with this Act; or
vi. the making of the award was induced or affected by fraud, bribery, undue
influence or corruption;
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Arbitrability can be divided into two

i. Objective-This would deal with what matters can be arbitrated upon and which ones
can not.
ii. Subjective-This would deal with who can take their disputes to arbitration and who can
not e.g Minors or in some countries government
Article 159 of the Constitution widens the scope of Arbitration.
Article 159 (2) (c) suggest that ADR can be used in all cases. Refer to the Judgment in
Mohammed Abdow vs Republic
JUDICIAL AUTHORITY
159.
I. Judicial authority is derived from the people and vests in, and shall be exercised by, the courts
and tribunals established by or under this Constitution.
II. In exercising judicial authority, the courts and tribunals shall be guided by the following
principles—
a) justice shall be done to all, irrespective of status;
b) justice shall not be delayed;
c) alternative forms of dispute resolution including reconciliation, mediation, arbitration
and traditional dispute resolution mechanisms shall be promoted, subject to clause
(3);
d) justice shall be administered without undue regard to procedural technicalities; and
e) the purpose and principles of this Constitution shall be protected and promoted.
III. Traditional dispute resolution mechanisms shall not be used in a way that—
a) contravenes the Bill of Rights;
b) is repugnant to justice and morality or results in outcomes that are repugnant to justice
or morality; or
c) is inconsistent with this Constitution or any written law.
Civil Procedure Act Section 59 and Order 46 with the issue of Arbitrability in Civil Matters only.
Part VI - Special Proceedings

Arbitration
59. All references to arbitration by an order in a suit, and all proceedings thereunder, shall be governed
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ORDER 46
ARBITRATION UNDER ORDER OF A COURT AND OTHER ALTERNATIVE DISPUTE RESOLUTION
[Order 46, rule 1.] Parties to a suit may apply for arbitration.
1. Where in any suit all the parties interested who are not under disability agree that any matter in
difference between them in such suit shall be referred to arbitration, they may,at any time before
judgment is pronounced, apply to the court for an order of reference.
The opposition of ADR especially in criminal matters is well documented see (Owen Fiss
Article).He argues that arbitration may achieve the peace but the society will be left without a
remedy.
Section 88 of the Consumer Protection Act 46 of 2012 specifically declares that any clause that
seeks to oust the jurisdiction of the High Court in consumer related dispute would be invalid.
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THE JURISDICTION AND POWER OF THE ARBITRATOR (By Mohammed Nyaoga)
In the context of arbitration jurisdiction refers to the power of the arbitrator to make decisions
that are binding on the parties to a contract.
Given the consensual nature of arbitration it is important that the jurisdiction of the arbitrator is
understood by the disputants and is properly defined by either the arbitral tribunal or court of
law.
In Kenya and most of the common law countries it is well settled that lack of jurisdiction on the
part of the arbitral tribunal renders proceedings invalid. And arbitral awards have been set aside
where courts have adjudged that the arbitral tribunal either exceeded its powers by making
arbitral determination on matters canvassed before it or rendered an award seeking to bind
persons not party to arbitration.
TYPES OF JURISDICTION
There are various types of jurisdiction that are recognized e.g
a) Jurisdiction Determined by the Parties
It is well settled that only parties to the arbitration agreement can consent to
arbitration.
See Structural Construction Company Limited vs International Islamic Relief [2006]
eKLR
CASE
Structural Construction Company Limited vs International Islamic Relief [2006] eKLR
The High Court of Kenya declined to enforce an award against a party that had not participated in the
arbitral proceedings. The Court held that the arbitral tribunal has no power to make an award that binds
third parties.
b) Jurisdiction Determined by the Subject Matter of the Dispute

The jurisdiction of the arbitral is also limited to the dispute referred to the tribunal.
The subject matter of the dispute is contained in the arbitration agreement which may
either be a substantive agreement or clause in the commercial agreement. See the
significance of subject matter in Blue Limited vs. Jaribu Credit Traders Limited [2008]
eKLR
CASE
Blue Limited vs. Jaribu Credit Traders Limited [2008] eKLR
The court emphasized that an arbitration clause operates as distinct contract.It creates an obligation to
the contracting parties to arbitrate
c) Jurisdiction Determined by Reference to Territory (Section 2 and 3 of the Act)

Jurisdiction may also be determined by reference to territory.
The arbitration Act recognizes “International arbitration” where
a) Parties are no resident in Kenya
b) The seat of the tribunal is outside the country
c) The place where the obligation will be substantially be performed is outside
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GROUNDS FOR CHALLENGING THE JURISDICTION OF THE ARBITRAL TRIBUNAL
Parties may base their objection on a wide range of grounds common grounds are
1. Procedure
A party may allege that an essential step has not been taken before the appointment of
an arbitrator.
Other arbitration clauses may provide for compulsory mediation to precede arbitration.
Others may provide for issuance of mandatory notices.
Courts will likely enforce such requirements if they are part of the arbitration
agreement.
2. Invalidity of Arbitration Agreement

A party may contend that the Arbitration agreement is not binding due to the existence
of vitiating factors such as fraud, misrepresentation, mistake, undue influence etc.
However the doctrine of separability may render such objections invalid (in so far as the
objection on jurisdiction are based on the validity of the underlying contract, the
arbitration clause cannot be invalidated).
However if there is overwhelming evidence that the arbitration agreement or award
was procured by fraud, courts of law are more likely than not to declare the arbitration
process a nullity.
See the American Case of Medina vs. Foundation Reserve Insurance Co.Inc
CASE
Medina vs. Foundation Reserve Insurance Co.Inc
The Supreme Court of New Mexico vacated an arbitration award and ordered a rehearing before a new
panel of arbitrators on the ground that the award was procured by Medina’s Fraud, corruption, and
undue means. The court explained the issues as follows:
“Substantial evidence in the record supports the district court’s findings of fact and application of law,
taking all evidence in the light most favorable to upholding the arbitration award…substantial evidence
is that evidence which is relevant and which a reasonable mind could accept as adequate to support a
conclusion”.
3. Limitation
Objections may also be raised on the grounds that the reference to arbitration is time –
barred.
Contractual time limits are usually strictly applied. However parties can extend the
prescribed timelines by mutual agreement.
See Sebhan Enterprises vs.Westermount Power (Kenya) Limited [HCCC No.239 of 2005]
CASE
Sebhan Enterprises vs.Westermount Power (Kenya) Limited [HCCC No.239 of 2005]
The High Court dismissed an application by a party who sought to challenge the award of the arbitral
tribunal on the grounds that it lacked jurisdiction to determine the dispute, the reference to the
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arbitration having been made out of the contractually prescribed time limits.
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4. Partiality and Competence of the Arbitral Tribunal

Some parties have lodged challenges based on the partiality and competence of the
arbitral tribunal; such challenges are made even when both parties have participated in
the appointment of the arbitrator.
However there may be situations where the arbitral tribunal though voluntarily
appointed by the parties, display partiality during the course of proceedings.
Conflicts of interest may also arise which were not known or disclosed prior to the
appointment.
5. Jurisdiction
Some parties have successfully challenged the conduct of the arbitration on the grounds
that the arbitrator acted outside the scope of his terms of reference.
See the following three cases.
CASE
Mairi vs. Ngonyoro “B” and Another [1986] KLR 488
Where it was stated that the arbitral tribunal must finalize the arbitral proceedings within the time
prescribed .The legal requirements as to time of completing the award has since then been consistently
applied by the Courts in Kenya.
CASE
Nyangau vs Nyakwara [1986] KLR
The Court of Appeal affirmed the decision in Mairi vs. Ngonyoro “B” and Another held that in
arbitration proceedings conducted under order of the court (Order 46 of CPR 2010) the arbitrator must
act within the stipulated time or extended by agreement. In this case the Superior Court had ordered
the arbitration to be conducted within 90 days.
The tribunal did not comply with the order and did not seek an extension of time. The Court of Appeal
upheld the Superior Court’s decision to set aside the award on the grounds that the arbitrator acted
outside the terms of reference. The Court of Appeal said :”It is clear that if an arbitrator was to conduct
the arbitration process outside the time set by the court or even if he has to file an award outside the
time specified, the proceedings or the award would be a nullity”.
CASE
M-Link Communications Company Limited vs. Communications Commission of Kenya and Another
Fred Ochieng J in enforcing strict requirements as to time held as follows
“Since the time for the arbitration proceedings lapsed on 15th December 2002 it would not be possible
for the arbitrators to conduct any proceedings until and unless the parties consented to extend time
through a written agreement, alternatively until and unless the court did extend the period.
6. No Dispute to Refer to Arbitration

The jurisdiction of the arbitrator may also be challenged on the grounds that no dispute
ha arisen to refer the matter to arbitration or that the dispute is not under purview of
the arbitration agreement.
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Disputes like this raises questions of fact and are best resolved by interpretation of the
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POWERS OF THE ARBITRAL TRIBUNAL TO RULE ON THE QUESTION OF ITS JURISDICTION
The right of an arbitral tribunal to rule on its own jurisdiction is generally accepted through out
the world.
It is normally captured in the doctrine of Kompetenz-Kompetenz.
In Kenya this is captured by Section 17 of the Act.

b) a decision by the arbitral tribunal that the contract is null and void shall not itself invalidate
the arbitration clause.
proceedings.
successful.
The power of the arbitral tribunal to decide on its own jurisdiction is made legally possible in a
number of ways:
i. Firstly the fact that the arbitration process is inherently consensual means that parties
can expressly confer jurisdiction on the arbitrator to determine the jurisdiction of the
tribunal.
ii. Secondly the concept of separability, dilatory tactics would allow parties to use
allegations of contract invalidity to delay arbitration until courts ruled on whether a
valid contract of arbitration existed. Under the doctrine of separability the reference to
arbitration remains intact unless the allegations are directed specifically towards the
invalidity of the arbitration clause.
Incorporation of the doctrine of Kompetenz-Kompetenz in Section 17 of the Act in clear and
succinct terms has reduced the number of disputes that seek to challenge the application of the
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The High Court recognized and applied the doctrine in the case of Kamconsult Limited vs
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Once the question of jurisdiction is raised it must be addressed before any substantive issues
are decided. The authority for this is the Court of Appeal case of Owners of the Motor Vessel
“Lillian S” vs. Caltex Oil (Kenya) Ltd [1986-1989] 1 EA 305 CAK
WHAT IS THE COURT’S ROLE IN THE DETERMINATION OF ARBITRABILITY IN KENYA?
Section 6 of the Act expressly requires that applications concerning decisions on arbitrability by
the arbitral tribunal to be filed in the High Court, it makes no mention of the standard of review
courts should apply when reviewing the arbitral tribunal’s ruling on its own jurisdiction. The
matter is solely at the discretion of the court.
See Kamconsult Limited vs Telkom Kenya and Another [2001] 2 EA 574 (CCK)
CASE
Kamconsult Limited vs Telkom Kenya and Another [2001] 2 EA 574 (CCK)
In an application to review the decision of the High Court under section 17 (6) of the Act, Ringera J ruled
that once a decision has been made under the section, there is no room for appeal or review. The judge
further held it was highly improper to ground an application for review under Order 44 of the Civil
Procedure Rules
WHEN SHOULD THE COURTS BE ABLE TO RULE ON THE QUESTION OF ARBITRABILTY?
The Arbitration Act requires an application to challenge the arbitral tribunal’s ruling to be made
to the High Court within 30 days of the notice of the ruling. However there is no legal
impediments to bring the before, during or after final award.
Under Section 6 of the Act the courts may be faced with arbitrability issue under an application
to compel a party to arbitrate.

a) that the arbitration agreement is null and void, inoperative or incapable of being
performed; or
b) that there is not in fact any dispute between the parties with regard to the matters
Section 6 of the Act governs proceedings to compel or stay court proceedings. In such a
proceeding the party seeking to compel or stay court proceeding must show that an agreement
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to arbitrate exists and that the other party refuses to participate in the arbitration process.
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i. Whether there is a valid written agreement to arbitrate and

ii. Whether the agreement covers the disputed issue.
See the following two cases
CASE
Esmailjy vs. Mistry Shamji Lalji [1985] KLR 150
The Court of Appeal made the decision that the High Court has discretionary power to determine
application for stay of proceedings leaves room for parties to raise jurisdictional challenges under
Section 6 of the Arbitration Act.
CASE
Lofty vs. Bedouin Enterprises Limited
The Court of Appeal emphasized that the High Court may reject an application for stay of proceedings if
such application is not made at the time of entering the appearance or if no appearance is entered at
the time of filing any pleading or the time of taking any step in the proceedings.
This is an obvious restatement of the principle that the arbitral tribunal does not have jurisdiction to
determine disputes filed in a court of law.
Another entry point for the High Court is where application are made after award is entered.
The High Court may contemplate the arbitrability issue after a final decision of the arbitral
tribunal under an application to vacate the award in accordance with Section 35 of the Act that
provides:

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See the case of Mehican Investment Limited and 3 Others vs. Giovani and 79 Others [Misc.Appl
No 792 of 2004]
CASE
Mehican Investment Limited and 3 Others vs. Giovani and 79 Others [Misc.Appl No 792 of 2004]
The High Court of Kenya declined to set aside an award on the ground that the award was strictly in
accordance with the tenor of the terms of reference to arbitration. From an analytical standpoint the
foregoing grounds of setting aside all revolve around the issue of jurisdiction.
KOMPETENZ-KOMPETENZ IN INTERNATIONAL ARBITRATION
Article 16 of UNCITRAL Model Law and Article 21 of UNCITRAL Rules of Arbitration
The arbitrator has the power to determine the validity of objections to his jurisdiction including those
objections relating to the existence and validity of the arbitration agreement.
Article 8 of the International Chambers of Commerce (ICC) Rules of Arbitration
There is a two stage process for determining jurisdiction .If the validity or existence of an arbitration
agreement is challenged, once the court is satisfied as to the prima facie existence of such an agreement
then any decision as to the arbitrator’s jurisdiction shall be taken by the arbitrators himself.
Article 41 (1) of the International Centre for Settlement of Investment Disputes Convention (ICSID)
States that the tribunal shall be the judge of its own competence.
RATIONALE FOR THE DOCTRINE OF KOMPETENZ-KOMPETENZ
The assumption of many commentators that most challenges to the competence of an

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arbitrator are in bad faith.

If dilatory tactics were permitted arbitration runs a risk of being perceived as an expensive
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Similarly parties lose an element of certainty in their litigation for an arbitrability issue,
beginning in arbitration may then be argued before High Court only to be returned to an
arbitrator.
The complexity and specialized nature of certain arbitral proceedings often lead parties to seek
arbitral rather than judicial dispute resolution in the first place.
Nevertheless there are many situations in which there is a genuine doubt as to the jurisdiction
of an arbitral tribunal .In these circumstances the initial reference of arbitrability issues to the
tribunal itself can be wasteful.
It should be noted however that courts can often actually complement and legitimize the
arbitral process e.g. a court may review a tribunal’s decision on a lack of jurisdiction decide it
was incorrect and commence new tribunal proceedings thereby favoring the reference to
arbitration.
More often a court may aid the process by appointing arbitrators ordering discovery or issuing
an order to compel arbitration, in these circumstances the court is encouraged to intervene as
opposed to being blamed for being too distrustful of arbitration.
Admittedly there must be some balance between intervention and co-operation.
THE VARIOUS STAGES AT WHICH THE COURT MAY INTERVENE
A) INTERIM COURT RULING ON ARBITRABILITY

The most common approach is for the arbitrator to make an interim ruling during the
arbitral proceedings
The approach allows the parties to know where they stand at the earliest opportunity
and prevents the loss of time and costs. This bolsters the argument that the tribunal
should rule on its arbitrability.
The court may thereafter uphold or reverse such ruling. If the arbitral tribunal makes an
interim ruling it usually can but need not be appealed to the High Court.
B) STAY OF ARBITRAL PROCEEDINGS

Interim rulings raise a parallel issue of whether the court can or should stay arbitral
proceedings until it rules on the validity of the interim ruling.
The Arbitration Act does not require the stay of arbitral proceedings pending a decision
on arbitrability.
The result of staying arbitral proceedings until a court review is completed is usually a
delay. For this reason it is argued that arbitration should automatically come to a halt
merely because one of the parties challenges the jurisdiction of the arbitrator,
otherwise there would be a premium on unmeritorious challenges.
Nevertheless there is no reason as to why the arbitral tribunal may not stay its own
proceedings pending the court’s ruling.
Practically once an application is made to the High Court arbitrators do frequently stay
proceedings unless the purpose is clearly to cause delay.
C) IMMEDIATE INTERVENTION
Legislation on arbitration usually provides for parties to challenge the jurisdiction of the
arbitral tribunal by recourse to a competent court when the arbitral process
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commences.
The party would then move for an order to halt the arbitration from proceeding.
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This ability to seek court review has given rise to proposal that the forum of the initial
proceeding should resolve the issue of jurisdiction first.
Article 16 (3) of the UNCITRAL Model Law has one distinctive caveat to its Kompetenz-
Kompetenz provisions: time limitation on jurisdictional challenges to interim rulings.
Article 16 (3) of the UNCITRAL Model Law

“If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request,
within 30 days….the court to decide on the matter……
The caveat is important in the sense that it attempts to vitiate the use of jurisdictional
challenges as an instrument of delay.
Thus this language promotes immediate resolution so as to avoid a wasted arbitration
while attempting to minimize the use of objections for dilatory purposes.
D) WITH FINAL AWARD ON THE MERITS

This approach involves postponing the review until the tribunal has given an award on
the merits.
This may result is a waste of time and costs if it is ruled that the tribunal incorrectly
exercised its jurisdiction.
The proponents of this approach look to keep interference to a minimum so that the
court ruling is less likely to influence the tribunal’s on the merits
The risk of the influence of the court on a tribunal therefore may mean that a
postponement of the review is preferable especially if the facts on arbitrability are
closely intertwined with the merits of the case.
Acknowledging these considerations the Arbitration Act has given maximum flexibility to
the parties themselves, allowing them to seek preliminary ruling, raise the objection to
the tribunal itself, or protest the matter to a court after the award has been rendered.
Article 16 of the UNCITRAL Model Law has been captured in Section 6 and 17 of the Act.
What this means is that an arbitral tribunal may rule on a plea either as a preliminary
question or in a final award on the merits. If the tribunal rules as a preliminary question
that it has jurisdiction any party may apply for the high court to finally decide the
matter. While such a request is pending, the arbitral tribunal may continue the arbitral
proceedings and make an award.
POWERS OF THE ARBITRATOR

In addition to the powers to rule on their own jurisdiction and unless the parties agree
otherwise the Arbitration Act provides the arbitrator with the following powers:
a) Vide Section 29 (3) –The power to decide the choice of law-where the parties
are not agreed on the choice of law the arbitral tribunal applies the law it
considers to be appropriate given all the circumstances of the dispute.
b) Vide Section 21 (2)- The power to determine the place of arbitration-The
arbitrator may determine the place of arbitration. Such determination must
have regard to the circumstances of the case and the convenience of the
parties.
c) Vide Section 12 (2) (a)- The power to appoint arbitrators-in arbitration with two
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arbitrators already appointed by the parties the arbitrators may appoint a third
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d) Vide Section 24 (1) –The power to determine the timetable for proceeding-The
arbitrator has the power where parties are not agreed to determine the
timetable for the filing of pleadings and documents. The arbitrator may also
refuse to amend pleadings where there is delay (Section 24 (3)). The tribunal
may also decide on the date on which arbitral proceedings will commence
(Section 22).
e) Vide Section 20 (2)- The power to make orders on the procedural and
evidentiary matters. Failing agreement by the parties, the arbitrator has the
power to determine the conduct of the proceedings (In exercising such power
the Arbitrator must have regard to the desirability of avoiding unnecessary
delay and expense while at the same time affording the parties a fair and
reasonable opportunity to present their cases).Where parties are not agreed to
determine the language of proceedings (Section 23 (1)).The arbitral tribunal has
powers also to determine the admissibility,relevance,materiality and weight of
any evidence (Section 20 (3)).The arbitrator also has powers to decide whether
its going to be an oral hearing or documents only proceeding, unless the
parties agree otherwise (Section 25 (1).The arbitrator may also apply to High
Court for assistance in taking of the evidence.(Section 28).
f) Vide Section 27 (1) (a) –The power to appoint experts or require expert
evidence to be provided to it. Unless otherwise agreed by the parties the
tribunal is able to appoint one or two more experts to report to it on specific
issues. A tribunal may also require a party to give the expert any relevant
information or to produce or provide access to any relevant documents, goods
or other property for inspection. (Section 27 (1) (b)).
g) Vide Section 18 (1) – The power to order interim measures of protection. The
tribunal when so requested by a party may order any party to make interim
measures of protection in respect of the subject matter of the dispute. The
tribunal may also require any party to provide security in connection with such
measure. With the 2009 Amendments now allow the arbitrator to order any
party to provide security in respect of any claim or amount in dispute (Section
18 (1) (b)).Notably the tribunal is also empowered to apply to the high court for
assistance in the exercise of these powers (Section 18 (2)-A party with approval
of the arbitral tribunal may also make such application for assistance.
h) Vide Section 18 (1) (c)-The power to make orders for security for costs (brought
about by the 2009 amendments), they are also empowered to seek assistance
from the courts.
i) Vide Section 26 (a)-The power to terminate proceedings where a claimant fails
to submit a Statement of Claim, the tribunal has the powers to terminate the
proceedings. Such powers however must be exercised with due regard to the
provisions on equal treatment that is each party must be given a fair and
reasonable opportunity to present their case.(See section 19 prior to the
amendment the arbitrator was required to give each party a “full opportunity”
of representing their case. Proceedings may also be terminated where the
claimant withdraws his claim (See Section 33 (2) (a) –This power may however
not be exercised when the respondent objects to the order and there is a
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legitimate interest in obtaining a final settlement of the dispute .One obvious

example would be where there is a counter claim).The power is also exercised
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party autonomy the parties’ agreement to terminate proceedings would leave

the arbitrator with no choice but to terminate the proceedings. Such an
agreement would effectively terminate the arbitrators’ mandate. Or where the
tribunal finds that the continuation of the proceedings has for any other reason
become unnecessary or impossible.
j) Vide Section 26 (b)- The power to proceed ex parte-The arbitrator may proceed
ex parte in two instances
i. Where the respondent fails to communicate his statement of defence
within the agreed time frame. Whilst the arbitrator may proceed ex
parte he is not entitled to treat such failure as an admission of the
claimant’s allegations.
ii. The second instance is where a party does not attend the hearing (See
Section 26 (c)).In this situation the arbitrator is entitled to continue the
proceedings and make an award on the evidence before it.(An
arbitrator is also entitled to make an award on the evidence before it
where a party fails to produce documentary evidence).
k) Vide Section 27 (d)-The power to dismiss a claim this power is available to the
arbitrator where the claimant fails to prosecute his claim..The arbitrator may
also give directions with or without conditions for the speedy determination of
the claim.
l) Vide Section 34 (a) (b)-The power to correct an award-The arbitrator may
correct any errors (computational, typographical or clerical) in his award either
on application of the parties or on his own motion (See Section 34 (3)).
m) Vide Section 32C-The power to award interest-The arbitrator may award
interest either in simple or compound.
n) Vide Section 32 B (1)-The power to determine and apportion cost and expenses
(Taxation)-This is as a result of the 2009 amendments. Notably the arbitrator
also has powers to exercise a lien over the award until full payment of the fees
and costs are made. (See Section 32 B (3)).
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THE ROLE OF THE COURTS IN ARBITRATION PROCEEDINGS-BY GITHU MUIGAI
There are three key phases of the arbitral process permissible scope of court’s intervention
i. The Court’s role before the commencement of the arbitration process.
ii. Secondly its role during the pendency of the arbitration particularly by way of
considering the regularity and legality of the award
iii. Thirdly its enforcement if appropriate.
See the case of Coppe Lavalin SA/NV vs.Ken-Ren Chemicals and Fertilizers Limited [1994] 2 ALL
ER 465
CASE
Coppe Lavalin SA/NV vs.Ken-Ren Chemicals and Fertilizers Limited [1994] 2 ALL ER 465
The House of Lords drew a distinction which is relevant in this regard between three groups of measures
that involve courts in arbitration.
I. First are measures that involve purely procedural steps and which the arbitral tribunal cannot
order and/or enforce e.g issuing witness summons to a third party or stay of proceedings
commenced in breach of the arbitration agreement.
II. Measures meant to maintain the status quo like granting of interim injunction or orders for
preservation of the subject matter of the arbitration.
III. Lastly are such matters as give the award the intended effect by providing means of
enforcement of the award or challenging the same.
Under the Kenyan laws there are two types of arbitration proceedings
i. Those concluded under the Arbitration Act 1995
ii. Those concluded under the supervision of the court under Civil Procedure Act
The involvement of the court in both under both procedures is quite different.
THE JURISDICTION OF THE COURT UNDER THE ARBITRATION ACT
The scope of the Court’s intervention in the arbitral process under the Act is circumscribed by
the general principle set out in Section 10 of the Act.

The limitation of the court’s intervention as stipulated in Section 10 of the Act was reiterated in
the case of Anne Mumbi Hinga vs. Victoria Njoki Gathara [2009] eKLR
The Act limits the role of the court to a few specified circumstances which are:
1. Determination of the enforceability of arbitration agreement.
2. Stay of court proceedings (Section 6)
3. Interim measures of protection (Section 7)
4. Appointment of Arbitrators (Section 12)
5. Termination of an arbitrator’s mandate (Section 15)
6. Determination of arbitrator’s jurisdiction (Section 17)
7. Assistance to the tribunal exercise powers conferred on it (Section 18)
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8. Assistance in taking evidence (Section 28)

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9. Setting arbitral awards (Section 35)

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10. Enforcement of awards (Section 36 and 37)

11. Appeals (Section 39)
1. Court Intervention before Commencement of Proceedings:
a) Enforceability of the Arbitration Agreement
Where properly drafted the arbitration agreement normally contains both the agreement to
arbitrate and the procedure by which this is to be done.
In principle the breach of an agreement to arbitrate may give rise to a claim for damages but is
in practice unlikely that any loss would have been suffered other than the costs of applying to
the court for a stay.
The Doctrine of Separability expressed by section 17 (a) of the Act states that the arbitration
agreement is independent of the main contract and is treated as such in case of a dispute
arising, therefore even where a contract is alleged to have been procured fraudulently the
arbitration agreement may still be valid and capable of being performed. See Premium Nafta
Products Limited and Other vs. Fili Shipping Company Limited and Others [2007] UKHL
CASE
Premium Nafta Products Limited and Other vs. Fili Shipping Company Limited and Others [2007] UKHL
The House of Lords stated “The principle of separability enacted in Section 7 (which is in pari material to
the Kenyan Section 17 (1) (a) means that the invalidity or recission of the main contract does not
necessarily entail the invalidity or recission of the arbitration agreement. The arbitration agreement
must be treated as “distinct agreement” and can be void or voidable only on the grounds which relate
directly to the arbitration…..”
See also the Kenyan Case (Court of Appeal) Adopt-A-Light vs. Magnate Ventures Ltd and 3
Others [2009] eKLR
CASE
Adopt-A-Light vs. Magnate Ventures Ltd and 3 Others [2009] eKLR
In this case the applicant (Adopt-A-Light) sought interim orders in the High Court under inter alia Section
7 of the Arbitration Act restraining arbitrators from proceeding with the hearing of the arbitration in
respect of a contract between the applicant and the City Council of Nairobi. The interim measures were
to last until the High Court determined whether the arbitrator was seized of jurisdiction ,considering
that the 2nd and 3rd respondents were not parties to the agreement that formed the substratum of the
arbitration .The High Court declined to grant Application and ordered that the arbitration proceeds with
the involvement of the 2nd and 3rd respondent. The appellant appealed to the Court of Appeal.
The Court stated “In view of the elaborate provisions set out in section 17 of the Arbitration Act, we
doubt whether the learned judge could have made any such order. Under the section:”the arbitral
tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence
or validity of the arbitration agreement and for that purpose
a) An arbitration clause which forms part of the contract shall be treated as an independent
agreement of the other terms of the contract.
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b) A decision by the arbitral tribunal that the contract is null and void shall not invalidate the
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It is clear under the section that an arbitrator has power to rule on the issue of his own jurisdiction and
on validity or otherwise of the agreement the subject of the arbitration and may even rule that the
contract is null and void”.
b) Arbitrability
Where any party raises the issue of whether or not a dispute has arisen, or whether the dispute
ought to proceed to arbitration, the issue then becomes one of interpretation of the contract
and in this respect the court has inherent jurisdiction to determine the matter. Even where the
parties have agreed that no action will be commenced until an award has been made i.e. that
arbitration is a condition precedent nothing would stop an action being commenced save that it
would be a defence that an award has yet to be made.
If the issue is raised in the tribunal it has jurisdiction to determine the issue save for the fact an
aggrieved party can approach the court within 30 days in this case the court has powers to
review the determination. (Section 17 of the Act).
Similarly the court also has powers to set aside an arbitral award
i. If it is satisfied that the award dealt with a dispute not contemplated by or
ii. not falling within the terms of the reference to arbitration or
iii. contains decisions on matters beyond the scope of the reference to arbitration
Provided that if the decisions on matters referred to arbitration can be separated from those
not so referred only that part of the arbitral award which contains decisions on matters not
referred to arbitration may be set aside.(Section 35 of the Act).
STAY PROCEEDINGS
One of the most important interventions that the Court can make in aid of the arbitration
process is to stay proceedings filed before it, pending the setting up of an arbitral tribunal. As a
general rule Courts will not decline to assume jurisdiction over a matter merely because of the
existence of an arbitration agreement.
There is also a duty on any of the parties to the arbitration agreement to object to the matter
proceeding in court. Upon this happening the court is seized of jurisdiction to stay the
proceeding arbitration. See the case of University of Nairobi vs. N.K Brothers Limited [2009]
eKLR
CASE
University of Nairobi vs. N.K Brothers Limited [2009] eKLR
The parties entered into a contract under which the respondent was to construct three separate entities
at one of the appellant’s campuses. The contract had an arbitration clause. A dispute arose as to the
authenticity of payments made by architects under the contracts and the appellant halted the payments
to the respondent. The respondent instituted a suit (vide a plaint) in Court to enforce the payments. The
appellant entered appearance in the suit and immediately filed a Notice of Motion under a Certificate of
Urgency seeking stay of the suit and reference of the dispute to arbitration.
The High Court dismissed the application on the grounds that the authenticity of payments involved
Architect, not the respondent and not a “dispute” within the meaning of the arbitration clause, thus not
subject to arbitration.
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ground that the issue of payment affected rights both of the respondent and appellant and so dell
within the definition of a “dispute” under the arbitration clause. The matter was referred to arbitration.
Where a suit is instituted by the plaintiff in disregard of a binding arbitration agreement clearly
designating an arbitral tribunal as the proper forum of resolving the dispute the power of the
court to stay pending proceedings may be revoked.
In this situation the defendant may apply to stay the court action unless he wishes to submit to
the court’s jurisdiction and repudiate the arbitration agreement.
While the court has no power to force parties into arbitration (Except under Order 45 of the Civil
Procedure Rules, Civil Procedure Act), it is obliged to uphold the arbitration agreement by
refusing audience to the plaintiff and referring the parties to their contractual dispute resolution
mechanism which is arbitration.
See the following case
CASE
Joab Henry Onyango Omino vs Lalji Meghji Patel and Company Civil Appeal No.119 of 1997
Unreported
The court settled the above principle it stated as follows “Once parties to an agreement have chosen to
determine their disputes or differences through a domestic forum other than resorting to the ordinary
courts of law, that choice should not be brushed aside
In addition where a court proceedings have been brought in breach of an arbitration agreement,
a stay of court proceedings may be sought in order to prevent concurrent proceeding. This
prohibition is also contained in Section 6 of Civil Procedure Act.
Stay of suit.
6. No court shall proceed with the trial of any suit or proceeding in which the matter in issue is also
directly and substantially in issue in a previously instituted suit or proceeding between the same parties,
or between parties under whom they or any of them claim, litigating under the same title, where such
suit or proceeding is pending in the same or any other court having jurisdiction in Kenya to grant the
relief claimed.
Explanation.—The pendency of a suit in a foreign court shall not preclude a court from trying a suit in
which the same matters or any of them are in issue in such suit in such foreign court.
See Naizsons (K) Ltd vs. China Road and Bridge Corporation Kenya Limited [Civil Appeal No 157
of 2000]
CASE
Naizsons (K) Ltd vs. China Road and Bridge Corporation Kenya Limited [Civil Appeal No 157 of 2000]
Bosire J (as he was then) stated that “it is the policy of the law that concurrent proceedings before two
or more fora is disapproved”.
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Application to stay suit for purposes of referral of the dispute to arbitration. The defendant’s admission
of the jurisdiction of the court in a defense is a complete bar to the matter being referred to arbitration.
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ought to have taken action to initiate the arbitration. The court however has discretion whether or not
to grant the stay. Application for stay of proceedings for purposes of referral to arbitration must be
made before any steps are taken in the suit. The burden of proving that there was strong cause for stay
to be granted was upon the applicant.
On the other hand the defendant’s admission of jurisdiction of the court is a complete bar to the
matter being referred to arbitration. See Kisumuwalla Oil Industries Ltd vs. Pan Asiatic
Commodities PTE Limited and Another [1997] eKLR
CASE
Kisumuwalla Oil Industries Ltd vs. Pan Asiatic Commodities PTE Limited and Another [1997] eKLR
The Court of Appeal stated the principle as “The parties can of course expressly agree to ignore or
disregard the (arbitration) clause. They may also do so by conduct. Once the parties have submitted to
the jurisdiction of the court, they cannot blow hot and cold and subsequently without consent of each
other rely upon the condition precedent in the arbitration clause. By not filing an application for stay of
the legal proceedings, the appellant has disentitled itself of clause 29 of the contract.
Condition Precedent To The Granting of Stay of Proceedings

Section 6 Provides

a. That the arbitration agreement is null and void, inoperative or incapable of being
performed; or
b. That there is not in fact any dispute between the parties with regard to the matters
As such the following conditions must exist before the Court grants a stay of proceedings
1. Existence of a Valid Arbitration Agreement

Before the Court can entertain an application for stay of proceedings it must
a) Satisfy itself that a valid arbitration agreement exists
b) Satisfy itself that a dispute contemplated by that agreement has come into
existence.
If an agreement is null and void, inoperative or incapable of being performed then the Court
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When would the Court deem an arbitration agreement to be null and void? Principally this
would be:
a) The case where the arbitration agreement was never entered into between the
parties in the first place. OR
b) Where it has become void due to intervening circumstances.
In Kenya the courts have held an arbitration agreement to be null and void where the
agreement purports to oust the jurisdiction of the Courts See:
CASE
Rawal vs The Mombasa Hardware Limited
The court of appeal held that arbitration clause does not oust or limit the jurisdiction of the court to
grant the reliefs sought by way of plaint.
When would the Courts hold an arbitration agreement to be inoperative or incapable of being
performed? The Courts in Kenya have held that the arbitration agreement cannot be enforced if
the parties have otherwise submitted to the jurisdiction of the Court; this may be as a result of
the defendant failing to seek a stay of proceedings at the appropriate time.
CASE
Tononoka Steels Limited vs. Eastern and Southern Africa Trade and Development Bank
The Court of Appeal stated that
“the original defendant instead of pleading as it did in paragraph 7 of the Defence that the Kenya Court
had no jurisdiction and the suit accordingly should be dismissed for want of jurisdiction, should have
made an application under Section 6 of the Arbitration Act 1995 for a stay of proceedings. No such
application was made in this case. The respondent followed a wrong procedure and it is manifest from
the record that Section 6 of the Arbitration Act was not referred to by counsel and is not referred to by
the learned trial judge in his ruling. Indeed it was not mentioned in the arguments on his appeal, but
being a matter of jurisdiction is clearly one which should now be taken. If an application had been made
at the proper time under section 6, it seems probable that the court would have been satisfied as to the
requisite matters set out in the section and would have made an order staying the proceedings. As
however no such application was made I am of the opinion that the other made should be quashed”.
2. Existence of a Dispute between the Parties with Regard to the Matters Agreed to be referred to
Arbitration
The question of whether or not an arbitrable dispute exists between the parties is not as simple
as it may first appear.
Part of the complexity lies in the definition of a dispute within the context of each case.
The courts must be satisfied that a genuine controversy exists which the parties had intended to
resolve by way of arbitration. In law not every disagreement between the parties raises an
arbitrable controversy. For instances a mere refusal to pay upon claim which is otherwise not in
dispute does not necessarily give rise to an arbitrable dispute. See
CASE
TM AM Construction Group (Africa) vs. Attorney General
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The plaintiff opposed the application for stay inter alia on the basis that the Attorney General was in fact
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a dispute with regard to the matters agreed to be referred to arbitration. The Court held that a party
who is wholly unable to produce the most minute evidence to support an allegation of a dispute in
contract has absolutely no right to come to this court to seek a stay of proceedings and reference to
arbitration because he for the first time alleges that there is a dispute between the parties. The failure
of the appellant to tender evidence showing that there is in fact any dispute between the parties means
that no basis has been established to show that a dispute in fact exists to justify staying the proceedings
and referring the parties to arbitration.
3. Other Issues to be Considered by the Court

Having satisfied itself that an arbitration agreement capable of being enforced exists and that a
dispute there under has arisen the Court must then turn to the other requirements of Section 6
(1).The provisions mandates that the application for stay of court proceedings and reference of
the parties to arbitration must be made:
a) Not later than the time when the applicant enters appearance or
b) Takes the appropriate procedural steps to acknowledge the legal proceedings
against that party or
c) Takes any other steps in the proceedings
See the following case
CASE
Nelliwa Builders and Civil Engineers Ltd vs. Jacob Ngaru Solomon and 3 Others [2004]eKLR
It was held that an application for stay of proceedings cannot be made after the applicant has made an
appearance or otherwise acknowledged the claim against which the stay of proceedings is sought; so
that the latest permissible time for making an application for stay of proceedings is the time that the
applicant enters an appearance.
An admission by the defendant of the jurisdiction of the court in a defence has been held to be
complete bar to the matter being referred to arbitration.
THE COURT’S ROLE DURING ARBITRATION PROCEEDINGS
1. Interim Measures of Protection before Arbitration

See Section 7 of the Act

of the application.
In granting interim measures of protection the court does not thereby assume jurisdiction over
the matters to be resolved by the arbitral tribunal.
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It is therefore important to distinguish the courts jurisdiction from that of the arbitral tribunal as
the latter has its own powers to grant interim measures of protection under Section 18 of the
Act.

a) Order any party to take such interim measure of protection as the arbitral tribunal may
measure; or
b) Order any party to provide security in respect of any claim or any amount in dispute; or
c) Order a claimant to provide security for costs.
subsection (1).
The law discourages parties from making parallel applications before the arbitral tribunal and or
the High Court. Section 7 (2) enjoins the court to adopt any ruling or finding on any relevant
matter to the application as conclusive.
2. Court Assistance to Arbitral Tribunal to Enforce Orders For Interim Measures.

The arbitral tribunal is mandated by Section 18 to grant interim measures of protection as it may
consider necessary in respect of the subject matter of the dispute.
This power extends to requiring any party to provide security in connection with the measures it
deems fit.
In enforcing its orders under this section the arbitral tribunal may seek assistance from the High
Court. As such application is pending arbitral proceedings continue.
The arbitration agreement will ordinarily specify the composition and mode of appointment of
the arbitral tribunal and hence court intervention in making the appointment is the exception to
the rule.
Nevertheless Section 12 (2) and (4) contemplates court involvement in the appointment of the
arbitral tribunal where
a) the parties are unable to agree on such appointment.
b) the party fails to cooperate in such appointment.
c) The third party institution which may be mandated by the arbitration agreement to appoint
the arbitrator fails to do so.

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2. The parties are free to agree on a procedure of appointing the arbitrator or arbitrators and
any chairman and failing such agreement—
d) in an arbitration with three arbitrators, each party shall appoint one arbitrator and the
e) in an arbitration with two arbitrators, each party shall appoint one arbitrator; and
f) in an arbitration with one arbitrator, the parties shall agree on the arbitrator to be
appointed.
d) has indicated that he is unwilling to do so;
e) fails to do so within the time allowed under the arbitration agreement; or
f) fails to do so within fourteen days (where the arbitration agreement does not limit the
4. If the party in default does not, within fourteen days after notice under subsection (3) has
been given—
c) make the required appointment; and
d) notify the other party that he has done so, the other party may appoint his arbitrator
as sole arbitrator, and the award of that arbitrator shall be binding on both parties as
if he had been so appointed by agreement.
set aside.
subject to appeal.
4. Termination of the Arbitrators Mandate

The court can terminate the mandate of an arbitrator on application by a party where the
arbitrator
a) Unable to perform the functions of his office or for any other reason fails to act without
undue delay or
b) Withdraws from his office or
c) Where the parties agree to the termination of the mandate
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15. Failure or impossibility to act

1. The mandate of an arbitrator shall terminate if—
a) he is unable to perform the functions of his office or for any other reason fails to conduct the
proceedings properly and with reasonable dispatch; or
b) he withdraws from his office; or
c) the parties agree in writing to the termination of the mandate.
2. If there is any dispute concerning any of the grounds referred to in subsection (1)(a), a party
may apply to the High Court to decide on the termination of the mandate.
3. A decision of the High Court under subsection (2) shall be final and shall not be subject to
appeal.
4. Where under this section or section 14(2), an arbitrator withdraws from his office or a party
agrees to the termination of the mandate of an arbitrator that shall not imply acceptance of the
validity of any ground referred to in this section or section 16(3).
5. Review of the Arbitral Tribunal’s Ruling on its Jurisdiction

The arbitral tribunal has discretion to rule on its own jurisdiction (Section 17)
Where the arbitral tribunal rules that it has jurisdiction any party aggrieved by the tribunal’s
ruling may apply to the court to decide the matters.
Such application must be made within 30 days of the notice of ruling.
6. Court Assistance in Taking Evidence

The Court may under Section 28 of the Arbitration Act assist the arbitral tribunal in taking
evidence.
Such application may be by the arbitral tribunal or a party with the approval of the tribunal.
Once such application is made the court may execute the request.
There is discretion for the court to apply the rules of evidence.
28. Court assistance in taking evidence

The arbitral tribunal, or a party with the approval of the arbitral tribunal, may request from the High
Court assistance in taking evidence, and the High Court may execute the request within its competence
and according to its rules on taking evidence.
THE ROLE OF THE COURTS AFTER THE ARBITRATION PROCEEDINGS
1. Appeals on a Question of Law Arising in Domestic Arbitration
Vide Section 39 of the Act-Parties in a domestic arbitration may agree to have appeals on
question of law arising in the course of the arbitration or in the award being subjected to an
appeal to the High Court.

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award,such application or appeal, as the case may be, may be made to the High Court

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a) determine the question of law arising
b) confirm, vary or set aside the arbitral award or remit the matter to the arbitral tribunal
for re-consideration or, where another arbitral tribunal has been appointed, to that
arbitral tribunal for consideration.
award; or
involved the determination of which will substantially affect the rights of one or more of
the parties, grants leave to appeal, and on such appeal the Court of Appeal may exercise
any of the powers which the High Court could have exercised under subsection (2).
Court of Appeal.
The court may either determine the question of law arising or confirm ,vary or set aside the
arbitral award or remit the matter to the arbitral tribunal for re-consideration or where another
tribunal has been appointed to the arbitral tribunal for consideration.
Unlike under the English Arbitration Act where an appeal to the High Court is as of right under
Kenyan law parties wishing to reserve their rights to appeal on a question of law must do so
expressly in the arbitration agreement.
An appeal to the Court on a point of law is not a review of the entire award as contemplated by
Section 35.The Court’s jurisdiction is limited to consideration of the issue of law raised and must
accept the facts as found by the arbitrator .
When an arbitral award has been varied on appeal the award so varied shall have effect as if it
were the award of the arbitral tribunal concerned.
2. Setting Aside the Award

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Vide Section 35 of the Act-The Court may on application of the party set aside an arbitration
award where the parties demonstrates that
i. A party to the arbitration agreement was under some incapacity
ii. The arbitration agreement is not valid under the law to which the parties have subjected
it or failing any indication of the law the law of Kenya (An arbitral award may be asset
aside where the High Court finds that the dispute is incapable of settlement by
arbitration under the law of Kenya. The Court will also set aside an award that is in
conflict with Kenya’s Public policy).See the following two cases:
CASE
Christ For All Nations vs. Apollo Insurance Co Ltd [2001] KLR 483
The court discussed the defence of public policy against the enforcement of an arbitral awards. It held
that an award might conflict with Kenya’s public policy if it was either
a) Inconsistent with the Constitution or other laws of Kenya whether written or unwritten.
b) Inimical to the national interest of Kenya
c) Contrary to justice and morality
The court held that the second category included the interest of national defence and security, good
diplomatic relations with friendly nations and the economic prosperity of Kenya. The third category
includes considerations whether the award was induced by corruption or fraud or was founded on a
contract contrary to public morals.
CASE
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Glencore Grain Ltd vs. Grain Millers Ltd [2002] KLR 1

The court held that the enforcement of an arbitral award which awarded compensation for a contract
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the performance of which would have released onto the Kenyan market maize which had been certified

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as unfit for human consumption was contrary to public policy.
iii. The party making the application was not given proper notice of the appointment of an
arbitrator or the arbitral proceedings or was otherwise unable to present his case.
iv. The arbitral award deals with a dispute not contemplated by or failing within the terms
of reference to arbitration or contains decisions on matters beyond the scope of the
reference to arbitration, provided that if the decisions on matters referred to arbitration
can be separated from those not so referred only that part of the arbitral award which
contains decisions on matters not referred to arbitration may be set aside.
v. The composition of the arbitral tribunal or the arbitral procedure was not in accordance
with the agreement of the parties, unless that agreement was in conflict with the
provision of the Act from which the parties cannot derogate; or failing such agreement
was not in accordance with the Act.
vi. The High Court finds that
a) The subject matter of the dispute is not capable of settlement by arbitration
under the Kenyan law.
b) The award is in conflict with public policy of Kenya.
An application for setting aside the arbitral award may not be made after 3 months have
award or if a request had been made under section 36 from the date on which that request had
3. Recognition and Enforcement of Awards
Subject to Section 35 and 37 of the Act an arbitral award irrespective of the state in which it
was made shall be recognized as binding and upon application in writing to the High Court shall
be enforced as such. The party shall furnish the court with the duly signed original authenticated
copy of the award to the court.
CASE
Kundan Singh Construction Ltd vs. Kenya Ports Authority [HCCC No.794 of 2003]
An application for recognition and enforcement of an arbitral award was struck out for failure to comply
with Section 36 (2) of the Arbitration Act. The Court found that there was not a duly authenticated
original arbitral award or a duly certified copy of it. Rather the court found that was not the court’s
record were photocopies of the arbitral award and arbitration agreement contrary to the requirements
of section 36 (2) of the Act which could only be waived upon application which had not been made.
4. Refusal of Recognition or Enforcement of the Arbitral Award.

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Court proof that—

accordance with the agreement of the parties or,failing any agreement by the
took place; or
court referred to in subsection (1) (a) (vi), the High Court may, if it considers it proper, adjourn
its decision and may also, on the application of the party, claiming recognition or enforcement
of the arbitral award, order the other party to provide appropriate security.
The recognition or enforcement of arbitral award irrespective of the state in which it was made
may be refused only At the request of the party against whom it is invoked if that party
furnishes to the High Court proof that:
I. A party to the arbitration agreement was under some incapacity
II. The arbitration agreement is not valid under the law to which the parties have subjected
it or failing any indication of that law, the law of the state where the arbitral award was
made.
III. The party against whom the arbitral award is invoked was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to
present his case
IV. The arbitral award deals with a dispute not contemplated by or not falling within the
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terms of reference to arbitration or contains decisions on matters beyond the scope of

the reference to arbitration provided that if the decisions on matters relent to
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arbitration can be separated from those not so referred that part of the arbitral award

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which contains decisions on matters referred to arbitration may be recognized and

enforced.
V. The composition of the arbitral tribunal or the arbitral procedure was not in accordance
with the agreement of the parties or failing any agreement by the parties, was not in
accordance with the law of the state where the arbitration took place.
VI. The arbitral award has not yet become binding on the parties or has been set aside or
suspended by the court of the state in which or under the law of which that arbitral
award was made
VII. If the High Court finds that:
a) The subject matter of the dispute is not capable of settlement by arbitration
under the law of Kenya or
b) The recognition or enforcement of the arbitral award would be contrary to the
If an application for the setting aside or suspension of an arbitral award has been made to a
court referred to in subsection (1) (a) (vi) the High Court may if it considers it proper adjourn its
decision and may also on application of the party claiming recognition or enforcement of the
arbitral award order the other party to provide appropriate security.
The criteria observed by Courts in setting aside the award of the arbitral tribunal under Section
35 of the Act and refusing to recognize or to enforce the award under Section 37 of the Act have
been spelt in two leading Court of Appeal decisions
CASE
Safaricom Limited vs. Ocean view Beach Hotel Limited and 2 Others [2010] eKLR
Safaricom Ltd (applicant) entered into a lease agreement with Ocean View Beach Hotel (1ST Respondent)
over LR No.4709 Section 1 Mainland North, Mombasa for 9 years and 11 months.
The Lease Agreement had an arbitration clause. The lease would enable the applicant to erect on the
suit land tower antennae, a dish communication business. The 1st respondent ultimately refused to sign
the lease agreement because the 2nd respondent (Salim Sultan Moloo) was a charge over the suit land
and refused to consent to the lease. The 2nd respondent issued a notice to vacate to the applicant.
There was also a 3rd Respondent (one Alsai (K) Ltd) which claimed to have a registered lease over the
suit land and demanded that the applicant remove its communication tower and other apparatus from
the suit land.
The 2nd and 3rd respondents were not parties to the arbitration. Pending arbitration the applicant sought
preservatory orders (an injunction) from the High Court under Section 7 of the Arbitration Act.
The Court of Appeal Held that pursuant to section 39 (3) of the Arbitration Act; appeal lies to the Court
of Appeal when parties so agree and High Court grants leave to appeal to the Court of Appeal or the
Court of Appeal grants special leave to appeal. The jurisdiction of the Court of Appeal is circumscribed to
determining questions of law arising in the course of arbitration and/or to confirm, vary or set aside
arbitral award or remit the matter to arbitral tribunal for reconsideration.
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In absence of an agreement by the parties to apply to High Court any matter arising from the arbitration
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or to appeal to High Court or the Court of Appeal, neither the High Court nor the Court of Appeal has the
jurisdiction to entertain the Application or the Appeal. The agreement to appeal against the arbitral

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award or to make an application to the High Court must be contained in the arbitration agreement itself.
CASE
Anne Mumbi Hinga vs. Victoria Njoki Gathara [2009] eKLR
The vendor (respondent) vide an agreement dated 14th January 1998,agreed with the appellant to sell
the suit property to the appellant for Ksh.1.5M.The appellant paid Ksh 230,000 on execution of the
agreement and the balance of Ksh.1,270,000 was to be paid within 60 days of execution of the sale
agreement. Parties disagreed on the manner of the payment of the balance of the purchase price and
because the sale agreement had an arbitration clause, vide the arbitration, the Chairman of the Law
Society appointed a sole arbitrator.
After hearing and giving notice to the parties, the arbitrator made and published his award on 19th
October 1999.The arbitrator found that the respondent had fully complied with the terms of the sale
agreement and that the appellant was in breach. After reading of the final award the arbitrator
forwarded copies of the award to the advocates for the parties and served the appellant with the notice
of filing the award in court.
The crux of the appeal was that the appellant had been notified of the date of the reading of the award
and that its advocate was not notified of the making of the award, Further the appellant contended that
a copy of the award was not availed to them. The appellant therefore sought to have the award struck
out or not to be enforced or recognized. The High Court dismissed the appeal dismissed the appeal and
found as a matter of fact both the notice of the making of the award and the application were duly
served as required. The appellant appealed to the Court of Appeal.
The Court of appeal held that the power of the High Court over an arbitral tribunal is exclusively
circumscribed in Section 35 and 37 of the Arbitration Act.
The Court further stated that Section 35 of the Arbitration Act bars any challenge of the arbitral award
even for a valid reason after 3 months from the date of delivery of the award…………Thus any
intervention by the Court of Appeal against the arbitral proceedings or the award can only be valid with
prior consent of the parties to the arbitration pursuant to section 39 (2) of the Arbitration .Even where
such consent is in existence the consent can only be on questions of law and nothing else. An appeal to
the Court of Appeal must be with leave of the High Court or special leave of the Court of Appeal. In
absence of all the foregoing preconditions to appealing to the Court of Appeal an appeal to the Court of
Appeal is improper and incompetent.
While commenting on the concept of finality of arbitral process, the Court of Appeal held that
permitting enhanced court review of arbitral awards opens the door to the “full bore” evidentiary
appeals that render informal arbitration merely a prelude to a more cumbersome and time consuming
judicial review process. Thus judicial review of the arbitral awards should be limited to specific grounds
listed in the statute. The appeal was thus struck out.
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COURT SUPERVISED ARBITRATION COURT ORDERED ARBITRATION UNDER ORDER 46, CIVIL
PROCEDURE CODE
Arbitration proceedings under Order 46 of the Civil Procedure Code are regarded as a court
supervised process.
Thus the court is able to intervene to a greater extent than is provided for by the Arbitration Act.
ORDER 46:ARBITRATION UNDER ORDER OF A COURT AND OTHER ALTERNATIVE DISPUTE RESOLUTION
[Order 46, rule 1.] Parties to a suit may apply for arbitration.
1. Where in any suit all the parties interested who are not under disability agree that any matter in
difference between them in such suit shall be referred to arbitration, they may,at any time
before judgment is pronounced, apply to the court for an order of reference.
[Order 46, rule 2.] Appointment of arbitrator.
2. The arbitrator shall be appointed in such manner as may be agreed upon between the parties.
[Order 46, rule 3.] Form of order.
3. (1) The court shall, by order, refer to the arbitrator the matter in difference which he is required
to determine, and shall fix such time as it thinks reasonable for the making of the award, and
shall specify such time in the order.
(2) Where a matter is referred to arbitration, the court shall not, save in the manner and to the
extent provided in this Order, deal with such matter in the suit.
[Order 46, rule 4.] Provisions where two or more arbitrators.
4. (1) Where the reference is to two or more arbitrators provision shall be made in theorder for a
difference of opinion among the arbitrators —
a) by the appointment of an umpire; or
b) by declaring that, if the majority of the arbitrators agree, the decision of the majority
shall prevail; or
c) by empowering the arbitrators to appoint an umpire; or
d) otherwise as may be agreed between the parties, or, if they cannot agree, as the
courtmay determine.
(2) Where an umpire is appointed, the court shall fix such time as it thinks reasonable for the
making of his award in case he is required to act.
[Order 46, rule 5.] Power to appoint arbitrator.
5. (1) In any of the following cases, namely —

a) where the parties cannot agree within thirty days with respect to the appointment of an
arbitrator, or the person appointed refuses to accept the office of arbitrator; or
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b) where the arbitrator or umpire—

i. dies; or
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ii. refuses or neglects to act or becomes incapable of acting; or

iii. leaves Kenya in circumstances showing that he will probably not return at an

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early date; or
c) where the arbitrators are empowered by the order of reference to appoint an umpire
and fail to do so, any party may serve the other or the arbitrators as the case may be
with a written notice to appoint an arbitrator or umpire.
(2) If, within seven clear days after such notice has been served or such further time as the court
may in each case allow, no arbitrator or no umpire is appointed, as the case may be, the court
may, on application by the party who gave the notice, and after giving the other party an
opportunity of being heard, appoint an arbitrator or umpire, or make an order superseding the
arbitration, and in such case shall proceed with the suit.
[Order 46, rule 6.] Power of arbitrator or umpire appointed by court.
6. Every arbitrator or umpire appointed under rule 4 or rule 5 shall have the like powers as if his
name had been inserted in the order of reference.
[Order 46, rule 7.] Summoning witnesses and default.
7. (1) The court shall issue the same processes to the parties and witnesses whom the arbitrator or
umpire desires to examine as the court may issue in suits tried before it.
(2) Persons not attending in accordance with such process or making any other default, or
refusing to give their evidence, or are guilty of any contempt to the arbitrator or umpire during
the investigation of the matters referred, shall be subject to the like disadvantages, penalties,
and punishments, by order of the court on the representation of the arbitrator or umpire, as
they would incur for the 111cc offences in suits tried before the court.
[Order 46, rule 8.] Extension of time for making award.
8. (1) The parties may, by filing an agreement in writing, extend the time for the making of the
award, whether or not at the date of the agreement time has expired, and whether or not an
award has been made since the expiry of the time allowed.
(2) On application made by a party, arbitrator or umpire on notice, the court may either extend
the time for the making of the award, whether or not at the date of the application time has
expired, and whether or not an award has been made since the expiry of the time allowed, or
make an order superseding the arbitration in which case it shall proceed with the suit.
[Order 46, rule 9.] Where umpire may arbitrate in lieu of arbitrators.
9. Where an umpire has been appointed he may enter on the reference in the place of the
arbitrators —
a) if they have allowed the appointed time to expire without making an award, or
b) if they have delivered to the court or to the umpire a notice in writing stating that they
cannot agree.
[Order 46, rule 10.] Award to be signed, dated and filed.

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10. Where an award in a suit has been made, the persons who made it shall sign it, date it and cause
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it to be filed in court within fourteen days together with any depositions and documents which
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[Order 46, rule 11.] Time for reading award may be fixed.
11. (1) The registrar shall within fourteen days of filing of the award notify the parties of such filing
and the notice shall specify a date and time for reading the award.
(2) The award shall be read within thirty days of the notice.
(3) On the date and at the time fixed by the notice the award shall be read by the registrar to
such of the parties as are present.
[Order 46, rule 12.] Statement of special case by arbitrators or umpire.
12. Upon any reference by an order of the court, the arbitrator or umpire may, and shall if so
directed by the court, state the award as to the whole or any part thereof in the form of a
special case for the opinion of the court, and the court shall deliver its opinion thereon, and shall
order such opinion to be added to and form part of the award.
[Order 46, rule 13.] Costs of arbitration.
13. The court may make such order as it thinks fit in respect of the costs of an arbitration save to
the extent to which an award of costs has been properly made by the arbitrator.
[Order 46, rule 14.] Power to modify or correct award.
14. The court may modify or correct an award—

a) where it appears that a part of the award is upon a matter not referred to arbitration
and such part can be separated from the other part and does not affect the decision on
the matter referred;
b) where the award is imperfect in form, or contains an obvious error which can be
amended without affecting such decision; or
c) where the award contains a clerical mistake or an error arising from an accidental slip or
omission.
[Order 46, rule 15.] Power to remit for reconsideration.
15. (1) The court may remit an award, or any other matter referred to arbitration, for
reconsideration by the same arbitrator or umpire upon such terms as it thinks fit
a) where the award has left undetermined any of the matters referred to arbitration, or
where it determines any matter not referred to arbitration, unless such matter can be
separated without affecting the determination of the matters referred;
b) where the award is so indefinite as to be incapable of taking effect; or
c) where an objection to the legality of the award is apparent on the face of it.
(2) The order remitting the award shall state the time within which it shall be reconsidered, and
rule 8 shall apply to such reconsideration as it applies to an award.
[Order 46, rule 16.] Grounds for setting aside award.

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16. (1) The court may set aside an award on the following grounds only —
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a) corruption or misconduct of the arbitrator or umpire; or

b) that either party has fraudulently concealed any matter which he ought to have

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disclosed, or has wilfully misled or deceived the arbitrator or umpire.

(2) An Application under this rule shall be served on the arbitrator or umpire.
(3) Where an award is set aside under this rule the court shall supersede the arbitration and
shall proceed with the suit.
[Order 46, rule 17.] Time for application.
17. An application may be made under rules 13, 14, 15 and 16 within thirty days of receipt by the
applicant of notice of the filing of the award under rule 10 or, where a date for reading the
award has been fixed by the court under rule 11 within thirty days of that date.
[Order 46, rule 18.] Judgment on award.
18. (1) The court shall on request by any party with due notice to other parties enter judgment
according to the award —
a) when no application has been made within the time allowed by rule 17; or
b) when an application under rules 13, 14 or 16 has been heard and determined and no
other application has been made within the time allowed by rule 17; or
c) when an application under rules 14, 15 and 16 has been heard and refused and no leave
to appeal against such refusal has been granted within fourteen days of that refusal.
(2) Upon the judgment so entered a decree shall follow and no appeal shall lie from such decree
except in so far as the decree is in excess of, or not in accordance with the award.
(3) Order 49, rule 2 shall apply to the entry of judgment under sub-rule (1).
[Order 46, rule 19.] Forms.
19. Form Nos. 28 to 32 of Appendix A shall be used for the respective purposes therein mentioned.
[Order 46, rule 20.] Alternative dispute resolution.
20. (1) Nothing under this order may be construed as precluding the court from adopting and
implementing, of its own motion or at the request of the parties, any other appropriate means
of dispute resolution (including mediation) for the attainment of the overriding objective
envisaged under sections 1A and lB of the Act.
(2) The court may adopt an alternative dispute resolution and shall make such orders or issue
such directions as may be necessary to facilitate such means of dispute resolution.
(3) Where a court mandated mediation adopted pursuant to this rule fails, the court shall
forthwith set the matter down for hearing and determination in accordance with the Rules.
From Order 46 of the Civil Procedure Rules above the Court is empowered to do the following
under Court Supervised arbitration
1. Appoint of the arbitrator upon agreement of the parties

2. Appointment of arbitrator in the following circumstances
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a) Where the parties can not agree within reasonable time

b) Where the arbitrator or umpire
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i. Dies
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iii. Leaves Kenya and may not return

3. Appointment of two or more arbitrators or umpire
4. Summon witnesses is the arbitrator requests for assistance
5. Extension of the time for making award if requested in writing by the parties
6. Fixing of the time for making the award.
7. Statement of special case by arbitrator or umpire
8. Make orders for cost
9. Modify or correct the award
a) Where the award appears to be for matters not referred to arbitration
b) The award is in imperfect form
c) Where the award contains clerical mistakes and omissions
10. Remit the award for reconsideration
a) Where the award has left undetermined any matters referred to arbitration.
b) Where the award is indefinite as to be incapable of taking effect.
c) Where an objection to the legality of the award is apparent on the face of it.
11. Set aside the award
a) Due to corruption or misconduct of the arbitrator or umpire
b) Either party fraudulently concealed any matter which he ought to have disclosed or has
willfully misled or deceived the arbitrator.
12. Enter judgment according to the award
a) When no application has been made within 30 days of receipt by the applicant of notice of
the filing of the award.
b) When an application to determine the cost of arbitration, set aside an award or remit an
award for reconsideration has been heard and determined and no other application has
been within 30 days of receipt by the applicant of notice of the filing of the award.
c) When every application to determine the cost of arbitration, set aside an award or remit an
award for reconsideration has been heard and refused and no leave to appeal against any
such refusal has been granted within 14 days of the refusal.
Upon the judgment so entered a decree shall follow and no appeal shall lie from such decree
except in so far as the decree is in excess of or not in accordance with the award.
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CLASS NOTES
The process of Arbitration is within the party’s’ power.
The Arbitral Tribunal must ensure that his appointment is proper and prima facie he has
jurisdiction over the process.
He can do this by checking or if any of the parties raises any doubt then the arbitrator should:
i. Have the challenge formulated clearly in writing.
ii. He could ask the partys’ to clearly agree to confer jurisdiction upon him or her.
iii. If they don’t agree the arbitrator can make a ruling on his jurisdiction.
JURISDICTION OF THE ARBITRAL TRIBUNAL
a) CHECKING JURISDICTION
If the arbitrator is chosen by the party’s he will check the agreement and other documents.
If the appointment is by a 3rd party e.g Institution the arbitrator should ensure that the terms of
the Arbitration Agreement are correct.
The arbitrator should check whether there are time limits and whether the appointment is
within the time limit. This is done by looking at the relevant statute and the limitation of actions
statute or the arbitration statute).Normally state bodies have a shorter time limit than other
bodies or private institutions.
The arbitrator will check whether there are any special terms on the scope or authority on the
agreement.
It is highly desirable that any issue of jurisdiction is dealt with in the earliest time possible.
b) CONTESTING JURISDICTION
The jurisdiction of the arbitral tribunal can be contested on several grounds
i. The agreement is invalid
ii. The subject matter is arbitrable or not (The issue of arbitrability)
iii. Whether the tribunal meets the minimum qualification
iv. Whether the dispute is within the scope of arbitration agreement.
v. Whether there is a dispute at all to be arbitrated.
vi. Conflict of interest with regard to the tribunal or any member of the tribunal.
PRINCIPLES OF JURISDICTION
Two principles that come out of the arbitral tribunal when dealing with the issue of jurisdiction
are
1. SEPARABILITY
It may be stated for the purpose of determining the jurisdiction the arbitration agreement is a
separate and independent of the underlying agreement.
The arbitration agreement can be separated from the main agreement and separated from the
main contract.
2. KOMPENTENZ-KOMPENTENZ
This is based on the German word for the same principle.
The arbitral tribunal has power to rule on its own jurisdiction.
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Section 17 (1) of the Arbitration Act provides that the Arbitral Tribunal may rule on its own
jurisdiction including a ruling on any objection with regard to the existence or validity of the
Arbitration Agreement .
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c) an arbitration clause which forms part of a contract shall be treated as an agreement
d) a decision by the arbitral tribunal that the contract is null and void shall not itself invalidate
the arbitration clause.
proceedings.
commence, continue and conclude arbitral proceedings, but no award in such proceedings
shall take effect until the application is decided and such award shall be void if the application
is successful.
Hence Section 17 (1) for that purpose
a) An arbitration clause which forms part of a contract shall be treated as an independent

agreement of other terms of the contract
b) A decision by the Arbitral Tribunal that the contract is null and void shall not in itself invalidates
the Arbitration clause. See the following cases
CASE
Kenya Telkom Limited vs. Kamconsult Limited [2001] [2] EALR (Ringera J)
CASE
Safaricom Ltd vs. Oceanview Beach Hotel Ltd [2010] eKLR (Nyamu JJ)
APPROACH OF TRIBUNAL ON ISSUE OF JURISDICTION

There are two options
1. It can make an immediate determination (after hearing the concerned parties)
2. It may defer the decision on jurisdiction and make it during the award itself while determining
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all aspects of the dispute.

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ASPECTS OF DETERMINATION
What aspects will go into determination
1. Nature of Objection –can it be determined on a preliminary point or must it wait until merits
have been heard.
2. The Arbitral Tribunal may direct itself to the decision in Mukisa Biscuits vs. West End Ltd [1969]
EA 696
CASE
Mukisa Biscuits vs. West End Ltd [1969] EA 696
The court offered the definition of preliminary objection as “A preliminary objection consists of a point
of law which has been pleaded which arises by clear implication out of the pleadings and which if argued
as a preliminary objection may dispose of the suit”.
The tribunal must establish whether the objection is bona fide or a waste of time.
If the objection requires an evidentiary hearing it is perhaps better dealt with as part of the
award itself.
Section 17 (6) of the Act (see above) provides that an aggrieved party can only challenge the
ruling of the Tribunal once they have received notice of the ruling by an application of the High
Court within 30 days.
Section 17 (8) of the Act (see above) provides that when an application to the High Court is
pending the Arbitral Tribunal may continue with the proceeding and make the final award.
Rule 3 of The Arbitration Rules provide that the application under section 17 of the Arbitration
Act shall be made via originating summons.
However the Arbitral Tribunal would want to have in mind the Court of Appeal decision in
Owners of Motor Vessel Lillian S vs. Caltex Oil Kenya Limited [1986] 289 [Vol 1] EARL pg 305
CASE
Owners of Motor Vessel Lillian S vs. Caltex Oil Kenya Limited [1986] 289 [Vol 1] EARL pg 305
In this case the court famously stated that jurisdiction is everything without it a court has no power to
make one more step. Where a court has no jurisdiction there will be no basis of continuing with the
proceeding pending other evidence.
THE ARBITRATION PROCESS

See Barnstein-Various Methods
1. Call a preliminary meeting of the parties at a venue convenient to the parties. It would be
practical for the arbitrator to choose the venue in the correspondence.
2. The letter should include agenda for the meeting (The appointing authority).
3. In the preliminary meeting the first thing is
a. Introduction of the parties (They are properly identified and their representatives)
b. Introduction of the tribunal and the tribunal qualifications if any.
c. The assumption should not be made that the people are familiar with the Arbitration
process.
d. Aspects of procedure will be dealt with i.e. what procedure will be adopted.e.g
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document only, look and sniff, expert etc But the arbitrator has the final power on the
procedure (See Section 20 of the Act)
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court.
e. History of the dispute will be narrated (Makes the arbitrator to appreciate the issues).
f. Disclosure for any interest by the Tribunal (See Section 13 of the Act).This is a
continuous duty.

independence.
g. Questions of the Tribunal’s Jurisdiction are handled.

h. Choice of Law (If it is an International Tribunal)
i. What are the Issues and how are the issues going to be determined (Are the parties
going to frame the issues or they are going to plead their issues, the question of
whether the issues can be reduced to the pertinent ones can also be addressed).
j. Aspects and issue of confidentiality (What is to be done with all the documents
exchanged).
k. Issue of Transcripts, how the transcript is going to be taken or who is going to pay for
the verbatim transcripts? Arbitration instituted under court guidance under order 45
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of the Civil Procedure Rules; the tribunal must file its award together with materials in
support of the award. In other decisions the tribunal can file the award only.
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l. Questions of exhibits and evidence and how they are going to be handled.

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m. Time-tabling (Schedule) for the hearing-mostly done in the afternoon.

n. Witness statements-How are these to be taken? Are there witnesses out of the courts
jurisdiction?
o. Questions of fees (and deposits to be paid) and agreements of other administrative
matters.(What happens when one of the parties refuses to pay.(Check the CIArb
Rules)
p. Issues of cost i.e should they be awarded or not?
q. The question of award –The type of award to be given (In the past the practice was
not to give a reasoned award but currently due to limitation of court interference
reasoned awards can be practical).
4. Communication between the parties all the communication must be copied to all the parties
and the parties can not engage in exparte communication with the arbitrator.
5. Tribunal would give an order for directions which would capture on what has been agreed on
the preliminary meetings e.g (Statement of claim should be served in X number of days ,the
reply should be fixed in X number of days and reply to dfence to be further filed in so may days
etc).How are the witness statements to be handled and issues of arbitration fees.
ARBITRAL TRIBUNAL POWERS

The arbitral tribunal powers stem from the Arbitration Agreement/Statute /Common Law on
arbitration/ Customs of the Trade.
See Nyaoga’s Article
ARBITRAL PROCEEDINGS
The basic format is that if lawyers are involved it will take the court process format where there
will be written submissions then the arbitrators retires to make the award (He should stick to
the time limits though).
Section 6,7 and 18 of the Arbitration Act basically deals with
a. The fact that arbitration is a voluntary process
b. Arbitration Agreement (Arbitration clause)
c. The question that if one of the party, the arbitration clause notwithstanding files the
matter in court. What is the defendant’s cause of action? And what the court can do?

c. That the arbitration agreement is null and void, inoperative or incapable of being
performed; or
d. That there is not in fact any dispute between the parties with regard to the matters
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of the application.
a. Order any party to take such interim measure of protection as the arbitral tribunal may
measure; or
b. Order any party to provide security in respect of any claim or any amount in dispute; or
c. Order a claimant to provide security for costs.
subsection (1).
STAY PROCEEDINGS
The courts play a supportive role on the arbitration process.
It is in this spirit that Section 6 of the Arbitration Act provides for the stay of legal proceedings if
one disregards the arbitration process and goes to court.
The other party would have a choice of whether to proceed in court or to apply for a stay of
proceedings and have the matter referred to arbitration (It is a conscious choice between the
advantages and disadvantages of arbitration).
The court will stay the proceedings
i. Unless it is found that the Arbitration Agreement is null and void or inoperative or
incapable of being performed. See Section 6 (1) (a)
ii. Or there is infact no dispute between the parties with regard to matters agreed to be
referred to arbitration.(For example is a mere refusal or inability to pay a debt a
dispute?)
The arbitration clause is specific to issues, if the issues are not specified one can go to court
despite the arbitration clause. The requirements are specified under Section 6 of the Act.
TIMING OF THE APPLICATION

The defendant is supposed to make the stay proceeding immediately before the filing of any
pleading.
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Any participation in the litigation will defeat the purpose of the stay.
It must be made no later than when the parties enter appearance or acknowledges the claim.
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A dispute is considered a difference of opinion.

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Once the application for stay is made the court before which the proceedings are made will
automatically stay the proceedings pending the hearing of the application.
Once the application is heard the court will determine whether to stay the proceedings and
refer the matter to arbitration or whether to proceed with the matter in court. (It is the policy of
the law to avoid concurrent proceedings in two different for a).
Once the parties have agreed to settle the matter through arbitration rather than the court; that
choice can not be brushed aside.
See the following two cases
CASE
Job Omino vs. Lalji Patel & Company [CA 119 OF 1997]
CASE
Niazsons Kenya Limited vs. China Road & Bridge Co-operation Kenya [2001] (Vol 2) EALR 502
Where the court held that for a court to grant stay of proceeding under Section 6 The court has to
consider three facts
1. Whether the applicant has taken any steps in the proceedings other than the steps allowed by
the section.
2. Whether there are any legal impediments on the validity, operation or performance of the
3. Whether the suit indeed refers to a matter agreed to be referred.
The provision is older than the current provisions of the Act. See the words of Madan J in Agip
Kenya Limited vs.Kibutu [CA 43 of 1981]
CASE
Agip Kenya Limited vs.Kibutu [CA 43 of 1981]
“The only way in which an application for stay to enforce an arbitration clause can be made is by way of
notice of motion supported by affidavit; it cannot be disguised as a point of law contained in the
pleadings as the application must be made before any step is taken in the suit. It cannot be incorporated
in pleadings, delivery of which constitutes a step in the proceedings”.
Under Rule 2 of the Arbitration Rules 1997 it was required that the application for stay be made
by Chamber Summons but changes to the Civil Procedure statutes has made it possible to effect
the same using or by notice of motion.
CONSTITUTING THE ARBITRAL TRIBUNAL

It is entirely upon the parties.
One could have a sole arbitrator; third party arbitrator can be nominated in the agreement in
practice it is not prudent to mention a specific person.
An arbitrator can be selected by the parties.
A better method is to have an institution or having a neutral party selecting the arbitrator.
Suppose the institution refuses to select an arbitrator what happens? (See case law)
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The institution can also start interpreting arbitration agreement e.g by stating that there is no
dispute for arbitration.
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In some instances each of the parties may appoint an arbitrator and the two arbitrators would
select a third one,the third arbitrator may act as an umpire between the two.
If there is failure to appoint-Section 12 (4) of the Arbitration Act provides for a remedy.
12(4)-If the party in default does not, within fourteen days after notice under subsection (3) has been
given—
arbitraor, and the award of that arbitrator shall be binding on both parties as if he had been so
appointed by agreement.
The party making the appointment will give notice to the other party;if there is default after 14
days of notice .The other party may appoint a sole arbitrator.
The party in default may challenge the appointment in the High Court but the court will only
allow the challenge if it is satisfied that there is/was a good cause for the failure or refusal to
appoint the arbitrator.
The arbitrator has been appointed Section 13 of the Act requires the arbitrator to disclose any
conflict interest or Interest he may have in the dispute.

independence.
If the interest is such that he may not be neutral then he nust or should decline such
appointment.
According to Barnstein the test to be applied is “would a reasonable man in the position of the
other party with the party’s experience of trade and knowledge of the circumstance think that
there was a real risk the arbitrator could not or would not fairly determine the issue”.
Sections 11-13 of the Arbitration Act Deals with selection and choice of the arbitrator.
PART III – COMPOSITION AND JURISDICTION OF ARBITRAL TRIBUNAL

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11. Determination of number of arbitrators

1. The parties are free to determine the number of arbitrators.
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2. Failing such determination, the number of arbitrators shall be one.

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3. Where an arbitration agreement provides that the reference shall be to two arbitrators, then,
unless a contrary intention is expressed in the agreement, the agreement is deemed to include a
provision that the two arbitrators shall appoint a third arbitrator immediately after they are
themselves appointed.
appointed.
given—
b) notify the other party that he has done so, the other party may appoint his arbitrator as
sole arbitrator, and the award of that arbitrator shall be binding on both parties as if he
had been so appointed by agreement.
set aside.
subject to appeal.

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independence.

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justifiable doubts as to his capacity to do so. A party may challenge an arbitrator appointed by
him, or in whose appointment that party has participated, only for reasons of which he becomes
aware after the appointment.
INTERIM MEASURES OF PROTECTION OF THE SUBJECT MATTER

How do you protect the subject matter? Before the appointment of arbitrators and after they
have been appointed.
The protection is needed to prevent against wastage and deterioration of evidence.
Section 7 of the Act empowers the court to grant interim orders to the parties before or during
the Arbitral proceedings.
Section 18 (1) of the Act grants the Arbitral Tribunal similar powers but in respect to the subject
matter of the dispute.

of the application.
d) Unless the parties otherwise agree, an arbitral tribunal may, on the application of a party—
d) Order any party to take such interim measure of protection as the arbitral tribunal may
measure; or
e) Order any party to provide security in respect of any claim or any amount in dispute; or
f) Order a claimant to provide security for costs.
e) The arbitral tribunal or a party with the approval of the arbitral tribunal may seek assistance
subsection (1).
f) If a request is made under subsection (2) the High Court shall have, for the purposes of the
proceedings before that Court, but the arbitral proceedings shall continue notwithstanding
that a request has been made and is being considered by the High Court.
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Interim reliefs (provisional and conservatory) are concerned with the requirement of a party for
immediate and temporary protection of rights or property pending a decision on the merits by
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the Arbitral Tribunal.

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They may include a number of objectives including:

1. To preserve or create a state of facts or of law which will secure effective execution of
the Arbitral award.
2. To stabilize the relationship between the parties for the duration of the proceeding.
3. Measures relating to evidence may be directed to preserve the evidence.
WHO MAY GRANT THE INTERIM RELIEF

Application for interim relief can only be directed to the tribunal once it has been appointed; the
court may grant the relied under Section 7 of the Act.
However the court will not likely grant interim measures which should be more properly be
sought from the Arbitral Tribunal.
The court is reminded of Section 10 of the Act which provides that the court should not
intervene except as provide for by the Act.

Section 7 of the Act does not regulate the interim measures that can be provided (no specific
list)
The approaches of Kenyan Courts have tended to approach this area akin to injunctive relief.
See the following Three Cases
CASE
Don-wood vs. Kenya Pipeline Ltd (HCCC 104 OF 2004)-Ojwang JB
In which decisions it was held in order to succeed the applicant has to show he has a prima facie case
with a possibility of success pending the determination of issue in accordance with the agreement.
See also Mugoya Construction and Engineering vs. NSSF (Ransley J)
CASE
CMC Holding Ltd vs. Jaguar,LandRover Export Limited [2013] eKLR
Where the court stated “ The orders are not automatic the purpose of interim measures of protection is
to ensure that the subject matter will be in the same state as it was at the commencement or during the
arbitral proceedings.
CASE
Safaricom Ltd vs. Ocean View Beach Hotel Ltd [CA No 327 of 2009](Nyamu J)
The court stated the essentials to be taken into account in issuing the interim measures would be
1. The existence of an arbitration agreement.
2. Whether the subject matter of the Arbitral Agreement is under threat.
3. In the special circumstance which is the appropriate measure of protection after the assessment
of the merits of application.
4. For what period must the measure be given especially if requested before the commencement
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of the arbitration so as to avoid encroaching in the tribunal’s decision making powers.

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Interim measures by their nature are not defined and questions have been asked if they stretch
to security of cost.
See Coppee Lavalin vs. Ken Ren Chemicals (In Liquidation) [1994] Vol 2 AER 449
CASE
Coppee Lavalin vs. Ken Ren Chemicals (In Liquidation) [1994] Vol 2 AER 449
INTERIM MEASURES OF THE TRIBUNAL

Section 18 of the Act gives the arbitral tribunal at the request of a party the power to order any
party to make interim orders of protection in respect of the subject matter of the dispute.
The tribunal’s power is more limited than that of the court under Section 7.
The Tribunal’s power may be excluded in the agreement of the parties.
The tribunal would also seek the powers or assistance of the High Court to enforce the Interim
measures .See Section 18 (2) of the Act.
The arbitrator can not order interim measures to 3rd parties (parties who are not subject/party
to the arbitration).
Even where measures are directed to a party it is necessary for the applicant to consider
whether the tribunal will be able to ensure compliance if the matter is urgent and if voluntary
compliance is uncertain the party may be advised to proceed to court directly.
The tribunal power may be limited by the agreement of the parties.
Some institutional arbitration rules give the tribunal powers to grant specific reliefs’ e.g.
CIArb.Rules provide that the arbitrator has jurisdiction to grant injunctive relief and
conservancy orders, orders for the protection, storage, sale and disposal of any property and
provide for security of cost.
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THE AWARD –BY GEOFFREY IMENDE AND WANJIRU NGIGE
Definition
Section 3 (1) of The Arbitration Act 1995 defines an Arbitral Award as “any award of an arbitral
tribunal and includes an interim arbitral award”.
The above definition is quite unclear Russell defines an award as the “final determination of a
particular issue or claim in the arbitration.”
Distinction between Award and Orders for Directions

An award (whether interim or final) is different from Orders and Directions issued by the
arbitrators (commonly referred to as orders for direction) which address the procedure by
which the Tribunal will be guided under Section 20 (2) of the Arbitration of the Act.

delay or expense while at the same time affording the parties a fair and reasonable
opportunity to present their cases.
court.
Thus matters to do with procedure ,timetables and appearances before the arbitrator are
addressed by Orders For Directions whereas determinations of jurisdiction and or the applicable
substantive law would be addressed by an interim award (e.g. matters covered by section 17 of
the Arbitration Act would be determined in an Interim Award as these matters go to substance
rather than procedure).
The distinction is necessary because while parties may have recourse to the courts where there
is an Award, whether Final or Interim the courts may not intervene where the issue is solely
procedural (See Section 10 which limits the courts intervention to the instances provide by the
Act.
CATEGORIES OF AWARDS
1. FINAL AWARDS
All awards may be said to be final in that (subject to the possibility of challenge in the
court) they dispose of one or more of the issues in dispute between parties and are
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enforceable.
However the term “Final Award” is customarily reserved for an award that finally
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determines all issues between the parties.

Final Awards are said to be “final” in three senses

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a) Firstly an Award is said to be final if it determines all the issues in the arbitration
or determines all issues not previously dealt with in prior awards.
b) Secondly an Award is final in that it is binding on the parties.
c) Subject to certain exceptions the delivery of the final award renders the arbitral
tribunal functus officio.
Section 32 A of the Act contains express provision as to the finality and binding nature
of the arbitral award as follows: Except as otherwise agreed by the parties an arbitral
award is final and binding upon the parties to it and no recourse is available against the
award otherwise than in the manner provided by this Act.
See the case of Rashid Moledina and Company Ltd vs. Hoima Ginners Ltd which set out
the court’s approach to an arbitration award:
CASE
Rashid Moledina and Company Ltd vs. Hoima Ginners Ltd
The court set out the approach to an arbitral award it stated
i. “Generally speaking the courts will be slow to interfere with the award in an arbitration having
regard to the fact that the parties to the dispute have chosen their method of settling their
dispute and have agreed to be bound by the arbitrator’s decision ,but the courts will do so
whenever this becomes necessary in the interests of justice and will act if it is shown as it is
alleged in this case, that the arbitration in arriving at their decision have done so on wrong
understanding or interpretation of the law”.
Courts are generally reluctant to interfere with an Award outside the ambit of Section 35 and 37
of the Act.
Subject to certain exceptions the delivery of a Final Award renders the arbitral tribunal functus
officio.See Section 33 of the Act.
33. Termination of arbitral proceedings

1. The arbitral proceedings shall be terminated by the final arbitral award or by an order of the
arbitral tribunal under subsection (2).
2. The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where—
a)the claimant withdraws his claim, unless the respondent objects to the order and the arbitral
tribunal recognizes a legitimate interest on his part in obtaining a final settlement of the the
b)parties agree on the termination of the arbitral proceedings; or
c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason
become unnecessary or impossible.
3. Subject to sections 34 and 35, the mandate of the arbitral tribunal shall terminate upon the
termination of the arbitral proceedings.
EXCEPTIONS TO THE GENERAL RULE

There are exceptions to the general rule that the delivery of the final award renders the arbitral
tribunal functus officio these being:
i. Where an application has been made to the High Court to set aside the arbitral
award.(See Section 35) Where appropriate and if so requested by a party ,The High
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Court may suspend the proceedings to set aside to give the arbitral tribunal an
opportunity to resume the arbitral proceedings or to take such other action as will
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ii. Where an appeal has been preferred against the award or an application made to the
High Court,the Court may remit the matter to the arbitral tribunal for reconsideration
(See Section 39).
iii. Where in an arbitration under order of the court ,the court remits an award (the order
remitting the Award to the Arbitrator must contain the time within which the Award
shall be reconsidered-See Order 46 Rule 15 (2) of CPR 2010) or any other matter
referred to arbitration for reconsideration by the same arbitrator where: the award has
left undetermined any of the matters referred to arbitration or where the tribunal
determines any matter not referred to arbitration ,unless such matters can be separated
without affecting the determination of the matters referred (See Order 46,Rule 15 (1)
(a) of CPR 2010) where the award is so indefinite as to be incapable of taking effect (See
Order 46 Rule 15 (1) (b)) and where an objection to the legality of the award is apparent
on the face of it (See Order 46 (1) (c)).
iv. Where a party requests the tribunal to make an additional award (See Section 34 of the
Act).
2. INTERIM AWARDS
An interim award is an effective way of determining matters that are susceptible to
determination during the course of the proceedings and which once determined may
save considerable time and money for all involved.
The power is derived from the arbitration agreement, from the applicable law or from
the Arbitration Act.
The effect of an award dealing with particular issues is to render the tribunal functus
officio on that particular matter. (There is issue estoppel).
The main disadvantage of an interim award is that it further avenue for review by the
courts (and consequent delay) is created.
Some of the matters on which the tribunal may make interim awards include
a) Jurisdiction
Section 17 (1) permits the tribunal to rule on its own jurisdiction. Such ruling
amounts to an interim award which may shorten or at least simplify the
proceedings considerably.
It is prudent to deal with the issue of jurisdiction as soon as it arises.
Section 14 also provides for any party challenging the appointment of an
arbitrator and for the tribunal to decide on such challenge. It should be noted
that where a challenge is unsuccessful, the aggrieved party may appeal to the
High Court before which the Arbitrator is entitled to be heard. Section 14 (8)
provides that where such an application is pending before the High Court ,the
parties may commence ,continue and conclude arbitral proceedings but no such
proceedings shall take effect until the application is decided and such an award
shall be void if the application is successful.
14. Challenge procedure

1. Subject to subsection (3), the parties are free to agree on a procedure for challenging an
arbitrator.
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2. Failing an agreement under subsection (1), a party who intends to challenge an arbitrator shall,
within 15 days after becoming aware of the composition of the arbitral tribunal or after
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becoming aware of any circumstances referred to in section 13(3), send a written statement of
the reasons for the challenge to the arbitral tribunal, and unless the arbitrator who is being

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challenged withdraws from his office or the other party agrees to the challenge, the arbitral
tribunal shall decide on the challenge.
3. If a challenge under agreed procedure or under subsection (2) is unsuccessful, the challenging
party may, within 30 days after being notified of the decision to reject the challenge, apply to
the High Court to determine the matter.
4. On an application under subsection (3), the arbitrator who was challenged shall be entitled to
appear and be heard before the High Court determines the application.
5. The High Court may confirm the rejection of the challenge or may uphold the challenge and
remove the arbitrator.
6. The decision of the High Court on such an application shall be final and shall not be subject to
appeal.
7. Where an arbitrator is removed by the High Court under this section, the court may make such
order as it thinks fit with respect to his entitlement (if any) to fees or expenses or the repayment
of any fees or expenses already paid.
8. While an application under subsection (3) is pending before the High Court, the parties may
take effect until the application is decided, and such an award shall be void if the application is
successful.
See the case of Lillian S vs Caltex Oil (Kenya) Ltd which settled the position of
jurisdiction in Kenya.
b) Applicable Law
Another example of a situation in which an interim award is likely to be made is
where there is a dispute between the parties as to the law or laws applicable to
the merits of the case. (See Section 29 (3) of the Act).
This by necessary implication places a duty on the arbitral tribunal to make a
reasoned determination of the law and rules to be applied in resolving the
dispute (See Section 20 of the Act).
c) Preservatory Interim Awards/Security for Costs.

Further the arbitral tribunal may make interim orders (awards) intended for the
protection of the subject matter of the dispute and the provision of security
both for the claim amount and for costs.
In Kenya where this power is not expressly conferred by the agreement of the
parties ,it may nevertheless be conferred by operation of the law.
See Section 18 of the Act.

a) order any party to take such interim measure of protection as the arbitral tribunal
may consider necessary in respect of the subject matter of the dispute, with or
without an ancillary order requiring the provision of appropriate security in
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connection with such a measure; or

b) order any party to provide security in respect of any claim or any amount in dispute;
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c) order a claimant to provide security for costs.

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subsection (1).
3. PARTIAL AWARDS
Section 32 (6) provides for the tribunal at any time to make partial award which some
but not all of the issues between the parties are determined.
Partial awards are likely where the tribunal separates the issues of quantum and
liability.
The arbitral tribunal first makes a determination on the question of liability before
moving on the rule on the extent of the quantum.
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4. ARBITRAL AWARDS ON AGREED TERMS (AGREED AWARDS).

Occasionally parties do settle the issues in dispute during the pendency of the arbitral
proceedings.
According to Section 31 of the Act where this happens the proceedings must be
terminated.
31. Settlement
1. If during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate
the proceedings and, if requested by the parties and not objected to by the arbitral tribunal,
record the settlement in the form of an arbitral award on agreed terms.
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2. An arbitral award on agreed terms shall be made in accordance with section 32 and shall state
that it is an arbitral award.
3. An arbitral award on agreed terms has the same status and effect as any other arbitral award on
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The settlement can be recorded in the form of an arbitral award on agreed terms which
has the same status and effect as any other arbitral award on the substance of the
dispute.
There are conditions to an agreed award being that a request must be made by the
parties and the tribunal must not object to the recording of the settlement.
An Agreed Award is subject to Section 32 of the Act, meaning that the award must
comply with all the formal requirements of an Award but need not contain reasons on
which it is based (See Section 32 (3) (b)).
Importantly such an award is also final and binding and the main advantage to recording
a settlement in terms of an Agreed Award is that enforcement of this award is simpler
than bringing proceedings to enforce the terms of settlement. If the award is
international it may be enforced by the NY Convention
5. ADDITIONAL AWARDS
An arbitration tribunal is able to make additional awards in amongst other
circumstances below
i. Claims presented before the arbitral tribunal but omitted from the arbitral
award-a party may request the arbitral tribunal to make an additional award in
respect of claims made but not addressed in the award – (See Section 34 (4)
such a request must be made within 30 days of the receipt of the Arbitral Award
and where the tribunal considers such a request justified, must make such
additional award within 60 days (See Section 34 (5).
ii. Correction of errors-a party may request the arbitral tribunal to correct any
errors in the Award. (See Section 34 (1) .The Tribunal may also make such
corrections of its own motion under Section 34 (3).Errors which the tribunal
may correct are set out in section 34 (1) (a) and include computation errors,
clerical or typographical errors or errors of similar nature.
iii. Interpretation of the Award-a party if agreed by the parties may request the
arbitral tribunal to give an interpretation of a specific point or part of the
arbitral award (See Section 34 (1) (b)).
34. Correction and interpretation of arbitral award; additional award

1. Within 30 days after receipt of the arbitral award, unless a different period of time has been
agreed upon by the parties—
a) a party may, upon notice in writing to the other party, request the arbitral
tribunal to correct in the arbitral award any computation errors, any clerical or
typographical errors or any other errors of a similar nature; and
b) a party may, upon notice in writing to the other party, request the arbitral
tribunal to clarify or remove any ambiguity concerning specific point or part of
the arbitral award.
2. If the tribunal considers a request made under subsection (1) to be justified it shall, after giving
the other party 14 days to comment, make the correction or furnish the clarification within 30
days whether the comments have been received or not, and the correction or clarification shall
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be deemed to be part of the award.

3. The arbitral tribunal may correct any error of the type referred to in subsection (1)(a) on its own
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initiative within 30 days after the date of the arbitral award.

4. Unless otherwise agreed by the parties, a party may upon notice in writing to the other party,

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within 30 days after receipt of the arbitral award, request the arbitral tribunal to make an
additional arbitral award as to claims presented in the arbitral proceedings but omitted from the
arbitral award.
5. If the arbitral tribunal considers the request made under subsection (4) to be justified, it shall
make the additional arbitral award within 60 days.
6. The arbitral tribunal may extend, if necessary, the period of time within which it shall make a
correction, give an interpretation or make an additional arbitral award under subsection (2) or
(5).
7. Section 32 shall apply to a correction or an interpretation of the arbitral award or to an
additional arbitral award made under this section.
iv. Costs and Expenses-parties unable to agree on costs often request the Tribunal
to tax the same. The decision on cost is then contained in the Additional
Award.(See Section 32 B).
6. MAJORITY AWARD
Unless the parties expressly agree otherwise in arbitral proceedings with more than one
arbitrator any decisions of the arbitral tribunal shall be made by a majority of all its
members (See Section 30 (1) of the Act).
The parties may appoint a chairman and further agree that where the majority is not
achieved the Chairman will make the decision.
Any member of the tribunal who does not assent to an award need not sign it and may
set out his or her own views of the dispute in a dissenting opinion. (Section 32 (2)
contemplates such a situation and provides that the signatures of the majority of all
arbitrators shall be sufficient so long as the reasons for the omitted signature is stated
30. Decision making by panel of arbitrators

1. Unless otherwise agreed by the parties, in arbitral proceedings with more than one arbitrator,
any decision of the arbitral tribunal shall be made by a majority of all its members.
2. Notwithstanding subsection (1), if authorized by the parties or all the members of the arbitral
tribunal, questions of procedure may be decided by the Chairman.
7. DEFAULT AWARD
A default award may occur in three situations:
i. The first is where the claimant in arbitration fails to prosecute his claim. The
arbitral tribunal may then make an award dismissing the claim (See Section 26
(d)).
ii. The second is where the respondent in arbitration fails to communicate his
statement of defence, fails to produce any evidence or does not take part in
arbitral proceedings. The arbitrator’s duty in such circumstance is to continue
the proceedings without treating such failure in itself an admission of the
claimant’s allegations (See Section 26 (b)).In such event the arbitral proceedings
may continue and the arbitral proceedings may make the award on the
evidence before it.(See Section 26 (b)).
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iii. The third situation occurs where either of the parties fails to appear at the
hearing or fails to produce documentary evidence.The arbitalproceedings may
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continue and the arbitral tribunal may make the award on the evidence before
it (See Section 26 (c).
26. Default of a party

Unless otherwise agreed by the parties, if, without showing sufficient cause—
a) the claimant fails to communicate his statement of claim in accordance with section 24(1), the
arbitral tribunal shall terminate the arbitral proceedings;
b) the respondent fails to communicate his statement of defence in accordance with section 24(1),
the arbitral tribunal shall continue the proceedings without treating such failure in itself as an
admission of the claimant’s allegations;
c) a party which fails to appear at a hearing or to produce documentary evidence, the arbitral
tribunal may continue the proceedings and make the award on the evidence before it;
d) the claimant fails to prosecute his claim, the arbitral tribunal may make an award dismissing the
claim or give directions, with or without conditions, for the speedy determination of the claim;
e) a party fails to comply with any order or direction of the tribunal, the tribunal may make a
peremptory order to the same effect, prescribing a time for compliance with the order;
f) a party fails to comply with a peremptory order of the tribunal to provide security for costs, the
tribunal may make an award dismissing his claim;
g) a party fails to comply with any other peremptory order, the tribunal may—
i. direct that the party in default shall not be entitled to rely on any allegation or material
that was the subject-matter of the order;
ii. draw such adverse inferences from the noncompliance as the circumstances justify;
iii. proceed to an award on the basis of such materials as have been properly provided to it;
iv. make such order as it thinks fit as to the payment of costs of the arbitration incurred as
a result of the noncompliance.
8. INTERNATIONAL ARBITRATION AWARDS

International Awards are recognized under section 36 (2) of the Act.
Awards under this head are enforced in accordance with the provisions of the New York
Convention.
For an Award to be enforced it must be translated into English language if it is not
already in English.(See Section 36 (4).
FORMAL REQUIREMENTS OF AWARD

The formal requirements of an award are directed by the arbitration agreement as well as
applicable laws and procedure
Statutory Requirements-Section 32 of the Arbitration Act has several requirements for an award
which must be
i. In writing. This facilitates enforcement and challenge
ii. Signed by the arbitrator or arbitrators. The date is also important to guide the
calculation of interest or the court to abide with the statutory time limits or appeals.
iii. The award must state the place at which it is made.(See Section 32 (4))
iv. Reasoned (See Section 32 (3).A reasoned award is one in which the tribunal states its
reasons for the decisions and these reasons form part of the award itself.Reasoned is
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the default position unless the parties agree otherwise.

v. Delivered to each party (See Section 32 (5) or Order 46 Rule 10).
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vi. Recitals-It is useful for an award to set out the circumstances leading to the award,
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(which goes to jurisdiction),the matters giving rise to the dispute, the appointment of
the arbitral tribunal, whether the proceeding s were conducted on a documents only
basis or oral hearings.
vii. Issues of dispute: The award should state what the issues in dispute are in order to
resist applications to set aside the award under Section 35 of the Act and also facilitate
appeal under Section 39 of the Act.
SUBSTANTIVE REQUIREMENTS OF AN AWARD

1. Valid Awards
An arbitral tribunal should ensure that it awards is not only correct but also valid and
enforceable.
2. Award Must be by the Tribunal on the Matters Referred to It.

An arbitral award may not be delegated i.e no part of it may be made or left to
somebody outside the arbitral tribunal
To be valid an award must comprise a decision by the tribunal on matters referred to it.
An award which does not do so may be set aside on grounds of misconduct.
3. Certainty
An award must also be certain in the sense that the decision of the tribunal on the
dispute or the matters dealt with must be clear from its face.
If the award is ambiguous it will be susceptible to Challenge under the setting aside
procedure under Section 35 of the Act.
Parties may also apply for an additional award to interpret specific points in the award.
In court ordered arbitrations an award is not valid where the award is so indefinite as to
be incapable of taking effect. With such award the court has powers to remit that award
to the tribunal for reconsideration.
4. Public Policy
A valid award must not deal with a dispute not capable of settlement by arbitration
under the law of Kenya and must also not be in conflict with the Country’s public policy.
Finally the award must not be influenced, induced or affected by fraud, bribery, undue
influence or corruption all of which are grounds under which the award may be set
aside.
5. Decisions Based on Expert Knowledge
Generally the award should be based on the evidence and submissions presented by the
parties.
If the parties appoint an arbitrator because of his knowledge and experience of a
particular trade or industry, the arbitrator is entitled to decide questions of quality,
compliance of the bulk with sample and the like on the basis of his own expert
knowledge.
6. Courts Power to Modify or Correct The Award

In arbitration under court order the court has power to modify or correct an Award in
Three situations these being:
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i. Where it appears that part of the award is on a matter not referred to

arbitration and such part is separable from the reminder of the Award without
affecting the decision on matter referred to arbitration.
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ii. Where the award is imperfect in form or contains an obvious error which can be
amended without affecting the decision
iii. Where the award contains clerical errors
EFFECT OF A VALID AWARD

A valid award is final and binding upon the parties and on any parties under or through
them.
Unless otherwise agreed in writing the effect of a valid award is to render the dispute
referred to arbitration res judicata.
The award is conclusive as to the issues with which it deals, unless and until there is a
successful challenge or appeal against the award.
The award is enforceable and upon its delivery renders the arbitral tribunal functus
officio
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CLASS NOTES
THE ARBITRATION AWARD
At the end of the arbitration proceedings irrespective of their nature the tribunal will always
render an award this is akin to judgment to a court proceeding.
It is distinguished for mere orders for direction under Section 20 (3) of the Act.(The award is
final)

admissibility, relevance, materiality and weight of any evidence and to determine at what
point an argument or submission in respect of any matter has been fairly and adequately put
or made.
court.
Section 32 of the Act deals with the formal requirements of the award.
1. The award must be in writing to allow for reference and enforceability.(Does an award
by electronic means satisfy this requirement).
2. It needs to be signed by the arbitrators of the tribunal (for authenticity).What about
dissenting opinions?
3. The parties can decide whether the award can be reasoned or not. The default position
is that an award should be reasoned.
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32B. Costs and expenses
1. Unless otherwise agreed by the parties, the costs and expenses of an arbitration, being the legal
and other expenses of the parties, the fees and expenses of the arbitral tribunal and any other
expenses related to the arbitration, shall be as determined and apportioned by the arbitral
tribunal in its award under this section, or any additional award under section 34(5).
2. Unless otherwise agreed by the parties, in the absence of an award or additional award
determining and apportioning the costs and expenses of the arbitration, each party shall be
responsible for the legal and other expenses of that party and for an equal share of the fees and
expenses of the arbitral tribunal and any other expenses relating to the arbitration.
3. The arbitral tribunal may withhold the delivery of an award to the parties until full payment of
the fees and expenses of the arbitral tribunal is received.
4. If the arbitral tribunal has, under subsection (3), withheld the delivery of an award, a party to
the arbitration may, upon notice to the other party and to the arbitral tribunal, and after
payment into court of the fees and expenses demanded by the arbitral tribunal, apply to the
High Court for an order directing the manner in which the fees and expenses properly payable
to the arbitral tribunal shall be determined.
5. The fees and expenses found to be properly payable pursuant to such an order shall be paid out
of the moneys paid into court and the balance of those moneys. if any, shall be refunded to the
applicant.
6. The decision of the High Court on an application under subsection (4) shall be final and not
subject to appeal.
7. The provisions of subsections (3) to (6) have effect notwithstanding any agreement to the
contrary made between the parties.
32C. Interest
Unless otherwise agreed by the parties, to the extent that the rules of law applicable to the substance of
the dispute permit, an arbitral award may include provision for the payment of simple or compound
interest calculated from such date, at such rate and with such rests as may be specified in the award.
TYPES OF AWARDS (Write Short Notes from Chapter 6 of the Book)
1. Final Award-Finally determines the issues before the parties, covers all issues previously not
covered .It is binding as between the parties and once it is rendered the tribunal becomes
functus officio.Jurisdictional awards are mainly considered final because they conceptually
determine whether the tribunal will proceed or not. If the tribunal finds that it has jurisdiction
then t the award is not final but if it finds that it has jurisdiction then it might not be final.
2. Interim Award-Covers issue such as the applicable law and procedure.
3. Partial Award-Part of the claim that is before the tribunal e.g. award on liability then dealing
with the issue of damages at a later stage.
4. Award on Agreed Terms-Parties have agreed on a settlement; merely recording the terms.
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5. Default Award-Failure to take steps in the arbitral proceedings leads to a default award against
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6. Additional Award-On issue such as cost or a deal with a matter which the arbitrator forgot in
the award and it was properly before the court.
STRUCTURE OF AN ARBITRATION AWARD

1. It should contain details of the arbitration agreement.
2. Date and the parties.
3. Date and method of appointment of the arbitrators.(Issue of Jurisdiction)
4. The procedure adopted (Documents only etc)
5. Statement on list of issues (Framing of the issues)
6. Arbitrators can proceed to state the facts (Each of the facts)
7. Make a determination on each of the issues.
8. Proceed with issues of law and make determination.
9. Finally make determination
10. Date of the award and Place of arbitration (See Section 32(4))
11. The currency of the award
12. Date of the enforcement of the Award
13. Section 32 (5) provides that signed copies of the award will be delivered to each of the parties.
14. Section 32B (2) deals with the issue of cost (the default position is that cost is determined by the
tribunal and where they are not determined they are shared equally among the parties).
RECOURSE AGAINST AN ARBITRAL AWARD

After the arbitration has been rendered the issue of enforcement is next.
If the party against whom the award is given voluntarily complies the issue comes to an end.
Where the party against whom the award fails to comply with the award the successful party
has to grapple with the issue of enforcement of the award.
Also the unsuccessful party may want to challenge the award on grounds that it was wrong on
merit, invalid or procedurally flawed.
Either way there are two options
a) Active Approach-The unsuccessful party takes initiative and challenges the award (See
Section 35 of the Act)
b) Passive Approach-The unsuccessful party leaves it to the victor to try and enforce the award
and then he goes to court to challenge against the enforcement (See Section 36 and 37 of
the Act).
PART VI – RECOURSE TO HIGH COURT AGAINST ARBITRAL AWARD

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vii. that a party to the arbitration agreement was under some incapacity; or
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ix. the party making the application was not given proper notice of the
x. the arbitral award deals with a dispute not contemplated by or not falling within
xi. the composition of the arbitral tribunal or the arbitral procedure was not in
xii. the making of the award was induced or affected by fraud, bribery, undue
iii. the subject-matter of the dispute is not capable of settlement by arbitration
iv. the award is in conflict with the public policy of Kenya.
PART VII – RECOGNITION AND ENFORCEMENT OF AWARDS
36. Recognition and enforcement of awards
1. A domestic arbitral award shall be recognized as binding and, upon application in writing to the
High Court, shall be enforced subject to this section and section 37.
2. An international arbitration award shall be recognized as binding and enforced in accordance to
the provisions of the New York Convention or any other convention to which Kenya is signatory
and relating to arbitral awards.
3. Unless the High Court otherwise orders, the party relying on an arbitral award or applying for its
enforcement must furnish—
a) the original arbitral award or a duly certified copy of it; and
b) the original arbitration agreement or a duly certified copy of it.
4. If the arbitral award or arbitration agreement is not made in the English language, the party
shall furnish a duly certified translation of it into the English language.
5. In this section. the expression “New York Convention” means the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations General
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Assembly in New York on the 10th June,1958, and acceded to by Kenya on the 10th February,
1989, with a reciprocity reservation.
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c) at the request of the party against whom it is invoked, if that party furnishes to the High
Court proof that—
viii. a party to the arbitration agreement was under some incapacity; or
ix. the arbitration agreement is not valid under the law to which the parties have
x. the party against whom the arbitral award is invoked was not given proper
xi. the arbitral award deals with a dispute not contemplated by or not falling within
xii. the composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties or,failing any agreement by the
took place; or
xiii. the arbitral award has not yet become binding on the parties or has been set
xiv. the making of the arbitral award was induced or affected by fraud, bribery,
d) if the High Court finds that—
iii. the subject-matter of the dispute is not capable of settlement by arbitration
iv. the recognition or enforcement of the arbitral award would be contrary to the
court referred to in subsection (1) (a) (vi), the High Court may, if it considers it proper, adjourn
its decision and may also, on the application of the party, claiming recognition or enforcement
of the arbitral award, order the other party to provide appropriate security.
Where the arbitration has an international dimension the setting aside has extra territorial
effects while refusal does not have the same effect.
ACTIVE REMEDIES-SETTING ASIDE OF THE ARBITRAL AWARDS

Section 35 sets an exclusive list of the grounds for actively attacking the award.
The parties making the application need to show that they fall within those grounds (one of the
grounds).
Section 10 and the Model Law which the Act is based are aimed at restricting court
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intervention.
Application to set award must be brought under timelines set under section 35 i.e 3 months
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GROUNDS FOR SETTING ASIDE AN AWARD

1. A party to the arbitration was under some incapacitation (Section 35 (2) (a) (i)).The award may
be set aside on the ground that one of the parties did not have capacity to enter an arbitration
agreement e.g. he was a minor, corporate entity or internal procedures were not followed).
2. The agreement is not valid under any law of Kenya e.g. Section 88 (1) of the Consumer
Protection Act 46 of 2012.
3. A party was not given proper notice of the appointment if the arbitrator or proceeding or not
given a chance to present their case. It is an issue of weighing Natural Justice and Default
Proceedings. See the case of Ann Mumbi Hinga vs. Victor Gathara [2009] eKLR.
CASE
Ann Mumbi Hinga vs. Victor Gathara [2009] eKLR.
4. The award deals with a dispute not within the scope of the arbitration agreement. However
where the issues can be separated only those outside the scope of arbitration agreement would
be set aside.
5. The composition of the Arbitration Tribunal was not in accordance with the agreement. (These
should be raised early enough).
6. The making of the award was induced by fraud, bribery and undue influence or corruption.
7. Where the High Court finds that the subject matter of the dispute is not settle able by
arbitration under Kenyan law (issue of arbitrability) or the award is in conflict with public policy.
Public policy is a dynamic concept .Public policy was defined by Ringera J (as he was then) in the
case of Christ For All Nations vs. Apollo Insurance [2002] EA 366.See also the statement of
Onyango Otieno J in Glencore Grain Ltd vs. TSS Grain Millers [2002] 1 KLR 606
CASE
Christ For All Nations vs. Apollo Insurance [2002] EA 366.
A matter is against public policy if it is inconsistent with the constitution or other laws whether written
or unwritten or it is inimical to the national interest of Kenya or contrary to justice or morality.
CASE
Glencore Grain Ltd vs. TSS Grain Millers [2002] 1 KLR 606
The judge stated that a contract or arbitration award is against public policy in my view if it is immoral,
illegal or it would violate in a clearly unacceptable manner legal and moral principles or values in Kenyan
societies.
It has been held that the word illegal here would hold a wider meaning than just against the law; it
would include contracts or acts that are void; against public policy. Would include contracts or
contractual acts or awards which would offend the conception of our justice in such a manner that
enforcement thereof would stand to be offensive.
APPEALS
Under Section 39 where parties have agreed that appeals are allowable then the High Court
may determine questions of law that arise and may vary or set aside the arbitration award.
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award, such application or appeal, as the case may be, may be made to the High Court.
a) determine the question of law arising;
b) confirm, vary or set aside the arbitral award or remit the matter to the arbitral tribunal
for re-consideration or, where another arbitral tribunal has been appointed, to that
arbitral tribunal for consideration.
award; or
involved the determination of which will substantially affect the rights of one or more of
the parties, grants leave to appeal, and on such appeal the Court of Appeal may exercise
any of the powers which the High Court could have exercised under subsection (2).
Court of Appeal.
PASSIVE RESPONSE
Under Section 36 of the Act-successful party seeks to enforce the award and the unsuccessful
party resists the enforcement
i. Recognition of the judgment-The court recognizing the award makes the matter Res
Judicata and puts an end to new proceedings.
ii. Enforcement-deals with giving the award legal force governed by section 36 (2) of the
Act.In order to enforce the award the applicant has to furnish the court with
a) A duly authenticated original award or certified copy
b) The original arbitration agreement or duly certified copy (If the award is not in
English a translation of the same)-See the New York Convention on Enforcement
of International (Foreign) Arbitration Award of 1958.
Recognition can only be refused only on the grounds on section 37 (1) and are similar to the
grounds on section 35.
Section 37 (1) (vi) which provides that one of the grounds for resisting enforcement is if the
award was set aside or suspended by the court of the state in which or under the law in which
the award was made.
SECURITY PENDING RECOGNITION AND ENFORCEMENT OF AN AWARD

Section 37 (2) provides that where application to set aside an award has been made to the High
Court, the High Court may order provision of appropriate security of cost.
See the case of Novak Chemicals vs Alcon International Ltd [HCCC 1124 OF 2012] Ringera J
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CASE
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One of the proposed advantages of arbitration is confidentiality but in the enforcement process
the confidentiality is likely or will be lost.
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LECTURE 9: 10TH MARCH 2014- 5.30-7.30PM (LECTURE HALL B2)
TOPIC 5: ONLINE DISPUTE RESOLUTION (ODR)

Online dispute resolution (“ODR”) can take place either entirely or partly online and concerns
two types of disputes: those that arise in cyberspace and those that arise offline.
As Internet usage continues to expand with its came new challenges, hence it has become
increasingly necessary to design efficient mechanisms for resolving Internet disputes because
traditional mechanisms, such as litigation, can be time-consuming, expensive and raise
jurisdictional problems.
As a result of the internet expansion ODR is also a developing area and it is technological based
Offline disputes, on the other hand, can be addressed with traditional dispute resolution
mechanisms supplemented with online technologies.
The traditional mechanism have inherent challenges giving ODR as the better option for
example traditional mechanism are
a) Time consuming
b) Tend to be expensive (Would one use traditional ADR when he has bought something
online worth less than 200 Shillings)
c) Raise jurisdictional issues.
This is not to say that ODR can not pose jurisdictional problems e.g we know that the online
environment is borderless so which jurisdiction or country of jurisdiction will be used).To see the
nature of this problem see the case of Bangura vs. Washington Post
CASE
Bangura vs. Washington Post
Lucille M. Ponte, Boosting Consumer Confidence in E-business: Recommendations for

Establishing Fair and Effective Dispute Resolution Programs for B2C Online Transactions, 12 ALB.
L.J. SCI. & TECH. 441, 442-44 (2002) -Summaries the above problem she says (“In cyberspace, e-
consumers with purchasing problems have no clear means of redress for their concerns because
cyberspace has no uniform laws and no unified court system. The global nature of the Web
challenges national sovereignty and traditional court authority and amplifies concerns about
choice of law and the enforceability of court judgments. The lack of well-established and
credible online conflict resolution mechanisms dampens consumer confidence in the online
marketplace and hurts e-tailers involved in cross-border transactions.”)
ODR is used to refer to different forms of online dispute settlement. It supplements the existing
ADR methods on the assumption that e-disputes can be resolved quickly via the internet.
Basically it is the application of computer networks methods to resolve disputes hence it can be
used to resolve e-disputes and a number of brick and mortar disputes. Sometimes it is also used
to describe or called telecommunication (phone based) disputes.
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There are some key advantages of ODR and definitely some key issues (challenges)
a) Advantages of ODR
It is inexpensive (No movement)
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It is potentially around the clock (247)

It eliminates posturing and gamesmanship associated with normal ADR
b) Issues Related with ODR

There are issues of trust (Based on the environment no contact ,no face to face)
It is hard to identify the parties with great certainty.
The issue posed with digital signatures (Suppose one changes their digital signature)
Issues of data security and confidentiality.
Issues of privacy
Issues of compliance
Technology itself can pose challenges (e.g. if the website of internet is not working)
Legal challenges e.g. applicable law, enforcement of contract and jurisdiction).
Most ODR services are designed to settle simple consumer based conflicts on a single monetary
issue.
Web-based technologies are already used even on traditional ADR e.g. submission of pleadings
but this is not truly ODR, this is just a mere employment of technology in traditional
ADR.Compare with cyber courts and tribunals which also admit evidence.
ODR is a real alternative to litigation and domestic courts. Its main feature is that it is done in an
online environment.
It is most suitable for claims that originate online i.e. the dispute is resolved in the environment
in which it is borne.
It can also be used for brick and mortar disputes but it is suggested that it is particularly helpful
in the international arena because it reduces distance and deals with issues of jurisdiction.
TYPES OF ODR METHODS

There are three main types of ODR methods namely
i. Online Settlement-using an electronic system
ii. Online Mediation and Arbitration-with the aid of an electronic system
iii. Online Mediation and Arbitration-with the aid of a neutral third party
1. ONLINE SETTLEMENT (USING AN ELECTRONIC SYSTEM)
This is fully automated cyber mediation or negotiation.

Here settlement is fully online and the neutral third party is also fully automated.
The software does not call for any interaction between the parties and merely asks for proposals
for settlement.
The programme software determines the zones for possible settlement.
The services in these sites are entirely online and the sites have neutral offers.
Websites such as Cybersettle, SettlementOnline and ClickNsettle offer services that are entirely
online and focus primarily on negotiating monetary settlements.
These websites serve as a neutral arena to exchange settlement offers. Offers of what?
Typically, an aggrieved individual (or, in most cases, his or her insurer), initiates a claim by
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logging onto the service’s secure website and setting a deadline for resolution, which is typically
30 to 60 days.
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The service then emails the other party to let him or her know that a settlement offer has been
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The party can either accept or decline to participate. If they decide to participate, he or she logs
onto the website and submits a demand. Computer software automatically compares the
demand with the settlement offer and emails both parties to let them know whether they are
within the “range” of settlement or whether there has been any movement towards settlement.
Cybersettle and SettlementOnline both allow three rounds of bidding. The cyber-negotiation
starts off with the initiating party entering settlement offers ranked for the first, second, and
third rounds and expiration dates for those rounds.
Computer software then emails the other party explaining that a settlement offer has been
made and requests the other party to put forth counteroffers for the first, second, and third
rounds.
Computer software then compares the offers and counteroffers for each round to ascertain
whether the parties have reached a settlement.
If the software determines that a settlement has not been reached, then their offers remain
confidential and future bargaining positions are unaffected.
ClickNsettle, on the other hand, allows many rounds of offers and counteroffers within a
specified period of time.
To ensure that the negotiations take place in good faith, partiers are required to increase (or
decrease) their offer (or counteroffer) by a specified percentage over their previous offer (or
counteroffer).
If a settlement is not reached within the specified time period, then the offers expire and the
cyber-negotiation fails.
The parties are, of course, free to resubmit their claim or move forward with another dispute
resolution mechanism, such as arbitration or litigation.
2. ONLINE MEDIATION AND ARBITRATION-WITH THE AID OF AN ELECTRONIC SYSTEM

These are technology assisted mediation and arbitration.
There is no human third party it is technology that plays the role of helping the parties reach a
solution by asking questions and suggesting possible answers and sending reminders.
The technology is used to enhance the possibility of settlement.
Good example is Square Trade which provided for settlement of claims arising from ebay
transactions but it stopped rendering services in 2008.
Another site is Modria.com founded in 2011
Mediation firms have established websites such as Internet Neutral, SquareTrade and
WebMediate to facilitate the resolution of disputes. Although these websites rely primarily on
online technologies such as e-mail, listservs, chat rooms, and instant messaging, they also
incorporate more traditional communication methods into the negotiation process.
Typically, a party contacts the service and fills out an online form that identifies the problem and
possible resolutions.
A mediator then reviews the form and contacts the other party to see if they will participate in
the mediation. If the other party agrees to participate, they can fill out their own form or
respond to the initial from through e-mail.
This initial exchange of views may help the parties to understand the dispute better and possibly
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to reach an agreement.
If the dispute remains unresolved, the mediator will work with the parties to help determine
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Internet Neutral allows the parties to choose from several online mediation alternatives,
including e-mail, instant messaging, chat conference rooms, and/or video conferencing.
The costs, however, vary depending on the online technology used and the length of the
mediation sessions.
For mediations relying on technologies other than e-mail (e.g. chat conference rooms or
videoconferencing), the parties are charged a half-day fee of $250 (and then $125 per hour after
the half-day), which is split equally between the parties.
Disputes with simple facts that rely entirely on e-mail are charged for the time that the
mediator spends preparing, sending and reviewing emails.
The fee varies from $1 to $6 per minute, depending on the disputed amount.
Internet Neutral uses conferencing software that enables the mediator to communicate with
the parties in designated channels or “rooms” accessed by passwords.
During the mediation, the software enables the parties to communicate through two channels:
one channel is for a private dialogue between one party and the mediator, while the other
channel is an open dialogue with all participants, including the mediator.
SquareTrade does not charge fees to the parties in the initial stage of its dispute resolution
process.
During this initial stage, the parties try to reach an agreement by communicating directly with
each other through SquareTrade’s Direct Negotiation tool, which is a completely automated
web-based communications tool.
If the parties are unable resolve the case through direct negotiation, then they have the option
of requesting assistance from a mediator.
SquareTrade is careful to explain that the mediator is not a judge or arbitrator, but merely
seeks “to facilitate positive solution-oriented discussion between the parties… The mediator will
only recommend a resolution if the parties request it.”
Even then, the mediator’s recommendation is not binding on the parties.
WebMediate provides a range of cyber-mediation services along with other dispute resolution
systems, including arbitration.
It claims to be the “only company to provide a fully-integrated range of ADR processes online –
alternatively, simultaneously, or sequentially.”
WebMediate offers parties an opportunity to begin with less powerful dispute resolution
mechanisms and, if those fail to reach a settlement, to move onto more powerful dispute
Almost all of WebMediate’s cases enter into their system through a fully automated cyber-
mediation process, Web Settlement, which is similar to the fully automated processes discussed
above.
If the dispute is not resolved through WebSettlement, then “parties may choose to involve an
experienced online WebMediator, to facilitate the discussion of their dispute and assist in
identifying and assessing options for resolution.”
After exhausting the WebSettlement and WebMediator options, the parties may then choose
WebArbitration and “submit their dispute for resolution by a third-party sitting in the role of a
private judge.”
3. ONLINE MEDIATION AND ARBITRATION-WITH THE AID OF A NEUTRAL THIRD PARTY

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The neutral third party is human.

The key difference with ordinary ADR is the luck of face to face (although this can be bridged by
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The technology plays an important role and sometimes the role is a force enough to be
considered a third force.
Examples of sites include juripax.com; themediationroom.com ;modria.com and
Oneaccord.com
One Accord uses an innovative negotiation process and a powerful computer software program
that enables multiple parties to participate in interest-based negotiation.
The process has several phases and “uses optimization . . . to transform conflicting objectives
into fair and efficient solutions.”
Initially, a third party facilitator works with the parties either in person or over the Internet to
help them express their interests and identify issues.
The facilitator is an attorney who has completed a special 30-hour online training course.
He or she helps the parties model a negotiation problem and complete a "Single Negotiation
Form," which outlines the underlying agreement and leaves blanks for unresolved issues.
The facilitator then works with each party individually to elicit their own initial confidential
preferences among each of the issues and possible outcomes.
Once the parties’ data is entered into the website, the One Accord software uses it to develop
settlement packages for the parties to consider.
The facilitator continues to work with the parties to evaluate settlement packages and to refine
preferences.
If the parties choose the same settlement package or “solution,” the software attempts to
generate improvements in order to maximize the benefits to both parties.
Once a party wishes to terminate the negotiation, a final written agreement is drafted with the
current solution and signed by all of the parties.
The most famous and successful ODR is the one of ICANN and WIPO which has a dispute
mechanisms based on the internet.
See Article 4 of the ICANN rules which deals with having domain names on good faith.
WIPO also has WIPO Arbitration and Mediation Centre
See Funzi Furnitures vs. UEFA [Decision 710 of 2000 WIPO Arbitration and Mediation Centre]
CASE
Funzi Furnitures vs. UEFA [Decision 710 of 2000 WIPO Arbitration and Mediation Centre]
Funzi furnitures of Mombasa had registered champions league.com when UEFA found it already
registered they referred the matter to ICANN.
Funzi Furnitures offered the domain name to UEFA for sell but UEFA declined and instead brought the
matter before the WIPO arbitration and mediation centre.
The arbitrator ruled that the Champions league.com had been registered in bad faith (Against Article 4
of WIPO regulations) and had the name transferred to UEFA
CHALLENGES OF ODR
1. Culture-Distinctive ideas and customs and social behavior and way of life of a particular society.
Kenyans have not assimilated the idea of ICT or e-commerce or the settlement of disputes.
Kenyans value personalized relationships and there is high level of illiteracy. But the adoption of
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2. ICT Infrastructure-Well not all places have the necessary ICT infrastructure to support ODR but
one could argue that we can plan for the future.
3. Regulatory Challenges-There is no legal regime to govern ODR.Kenya Information and

Communication Act has updated and has contained main features and recommendation by
UNCITRAL Model Law on e-commerce 1996.At regional level there is no Consumer Protection
Legislation or frame work and there is no regional or global hard law specifically governing
ODR,we therefore had to turn to ordinary ADR mechanism and adopt them for ODR.At the
domestic level one has to refer to the Arbitration Act 1995 and the Rules there after and
consider how you would make arbitration enforceable.
ARE THERE SPECIFIC OBSTACLES TO ODR UNDER THE CURRENT ARBITRATION ACT
1. How does one make an online award enforceable?
2. At regional and international level one has to look at the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards.(1958)
3. For example the need to have the agreement in writing does it poses challenges and how one
deal with that does.
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LECTURE 10: 17TH MARCH 2014- 5.30-7.30PM (LECTURE HALL B2)
TOPIC 5: TRADITIONAL DISPUTE RESOLUTION

Introduction
There are many definitions for Traditional Justice System (TJS) and many appellations have been
used to refer to it including ‘...Community Justice System (CJS), Traditional Justice System (TJS),
traditional non-formal, informal, customary, indigenous and non- state justice systems are used
interchangeably in different contexts to refer to localized approaches by communities to attain
justice...Traditional Justice Systems refer to all those people-based and local approaches that
communities innovate and utilize in resolving localized disputes, to attain safety and access to
justice by all.
The history of Kenya’s Judiciary can be traced to the East African Order in Council of 1897. It was
based on a tripartite division of subordinate courts; that is, Native courts, Muslim courts and
those staffed by Administrative officers and Magistrates.A dual system of superior courts was
also established, one court for Europeans and the other for Africans. The colonizers realized
there was need for dispute resolution mechanism for natives. They empowered headmen, chiefs
and village elders to settle disputes as they had done in the pre-colonial period. These
traditional dispute settlement organs gradually evolved into tribunals. They were accorded
official recognition in 1907 when the Native Courts Ordinance was promulgated. This ordinance
established native tribunals that were intended to serve each of the ethnic groups in Kenya.
At this time the governors supervised the tribunals. One could appeal against the decisions of
these tribunals to the D.O and or D.C and finally to the PC. The final appeal lay with the Supreme
Court. The native tribunals could be said1 to have formed part of the ordinary judicial system of
Kenya as advocates were permitted to appear before them. In 1950 the African Courts
Ordinance abolished the Tribunals and replaced them with African Courts. The reason why the
whites settlers choose chiefs and headmen to seat in the native tribunals is because they
perceived that they were familiar with the customary laws and notions of justice will make their
decisions acceptable to the communities they lived in Magistrate’s Courts Act 1967 was created
with the main aim of abolishing native tribunals. Under the British protectorate, Kenya had
parallel legal systems with African courts applying customary law, and appeals lying with the
African Appeal Court, then with the District Officer and then a Court of Review.
The Jurisdiction of the Colonial Native Tribunals

Abraham Lincoln laid the basis for traditional alternative dispute resolution when he said
‘Discourage litigation persuades your neighbor to compromise whenever you can. Point out to
them how the nominal winner is often a real loser in fees, expenses and waste of time.’
Traditionally, different ethnic communities had a structured way of settling disputes either
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through their chiefs or through a council of elders. The Digos had their kayas, Ker among the
Luos; the Merus had ‘NjuriNcheke’; and so on.
Two systems of justice exist parallel to each other and they include the Western justice system
which by its nature is retributive, hierarchical, adversarial punitive and is guided by codified laws
and written rules, procedures and guidelines. The African cultural justice system on the other
hand is based on customary and unwritten laws, traditions and practices that have been learnt
over time and through experience. They embrace the ‘whole’ person and seek to restore broken
relationships in the community. TJS are concerned with peacemaking rather than the allocation
of rights. Current practice shows that modifications have been done to these systems
commensurate with current formal legal structures, the Constitution of Kenya 2010 article 159
(2c); has entrenched informal dispute resolution in it, “alternative forms of dispute resolution
including reconciliation, mediation, arbitration and traditional dispute resolution mechanism
shall be promoted provided it does not contravene the Bill of Rights and is repugnant to justice
and morality or results in outcomes that are repugnant to justice or morality or any written
law”. The provincial administration has also stepped in where the formal justice system has
fallen short. Here, the chief or sub-chief assisted by elders; acts as a negotiator, arbiter or a
mediator or a cocktail of these.
Many Kenyans are frustrated and dissatisfied with the court process hence the tendency to trust
alternative means of accessing justice. TJS are viewed as being accessible, impartial and
affordable. In the Traditional legal system the parties may be required to meet seating
allowance and maybe transport of the elders. It is also perceived as incorruptible, proceedings
and language are familiar, accessible at all times, affordable, utilizes local resources, decisions
are based on consensus, and seek to heal and unite disputing parties. This is unlike the formal
system that is seen as breeding hatred.Due to the credibility challenges facing the formal justice
system, Kenyans particularly the poor and marginalized have resulted to the informal justice
system. This mode of solving disputes varies from one community to another. Though not
specifically provided for in Kenya’s statues this dispute resolution method is widely practiced
and accepted by Kenyans. Rural folk and those in slums in urban centers rely on Informal Justice
System (IJS) because they have no alternatives.
Historically speaking, the government has largely ignored the TJS with some courts treating it
with contempt. This is a carryover of the colonial mentality where African cultures were seen as
backward, uncouth and uncivilized. The judicial attitude was that, though acceptable and being
applicable to courts of law, customary laws were inferior to English laws.2 For instance in
Republic v Amkeyo3the wife to the Accused person was forced to testify against him for theft.
The judge dismissed customary marriages as mere wife purchase, and failed to consider the
woman as lawful wife to the accused person.
TJS can be dynamic and have; in some circumstances been modified to suit modern societies.
There are some TJS that have yielded ground and agreed to include women as elders.
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Government services; including legal services have not reached the lowest levels of government.
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The provincial administration especially the chief and assistant chief have continued to play the
dual role of being the local administrators as well as mediators in TJS. This has the effect of
confusing the public on where to seek justice and the role of the administrators. These
administrators have exploited this grey area as a means to extort them. The TJS hardly
differentiate between criminal and civil cases. Land matters, family disputes, domestic violence,
theft, marriage and divorce are some of the cases that are dealt with by TJS. Cases, which
cannot be resolved through the chiefs, are often referred to the courts. There is a tendency to
confuse ‘referral’ and ‘appeal’. Since the formal justice system does not expressly recognize TJS
the cases, which are ‘appealed’ to the law courts, have to start afresh. Serious offences such as
murder may be referred to the courts though some IJS have their own procedures regarding
murder.
Native Tribunals Abolished By the Magistrates Act

When the white setters invaded Kenya they tried to abolish the council of elders and introduced
their own formal court system but this lasted for only five years. After the five years and it was
very clear that the courts could not deal with African matters since most of them were guide by
African traditions which was a complete foreign concept to the white settlers, they allowed and
helped the native to establish and deal with their own justice system hence the native tribunal.
Two systems of justice existed parallel to each other and they include the Western justice
system which by its nature is retributive, hierarchical, adversarial punitive and is guided by
codified laws and written rules, procedures and guidelines. The African cultural justice system
on the other hand is based on customary and unwritten laws, traditions and practices that have
been learnt over time and through experience. They embrace the ‘whole’ person and seek to
restore broken relationships in the community. TJS are concerned with peacemaking rather than
the allocation of rights.
Even though the natives were allowed to deal with their matters the native tribunals were
supervised by the governor who had powers to interfere and even quash any decisions made by
the native tribunal. As time went by, the decisions of the tribunals could be appealed to the D.O
then the D.C and sometimes to the P.C. lawyers stated appearing for their clients, the
magistrates could sit in the tribunal.
The process of integrating the judicial system began in 1962 when powers of administrative
officers to review African Courts' proceedings were transferred to magistrates and then the
process was completed by the passage of two acts in 1967. The Magistrates' Courts Act 1967
abolished African Courts and the Court of Review and established District and Resident
Magistrate's Courts, which had the various classes as well as the High Court. The Kadhis' Courts
Act 1967 established six Kadhis' Courts for the application of Muslim personal status law.
Creation of the Magistrates Courts was aimed at restructuring and standardizing the legal
system and therefore mitigating the shortcomings of the native courts some of which
included;Systemic biases and discrimination, gender insensitivity mainly bias against women
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based on the African patriarchal customs, unreliable award enforcement mechanisms, some
laws being contrary to the constitution, written law and human rights and limitation in terms of
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The Magistrates Courts provided a reputable legal institution but not without major drawbacks
to native Africans because of the loss of some key benefits that the Native courts uniquely
provided. Some of these were: Time efficiency because there were fewer procedural
requirement, inclusive participation by all parties because of a common language, cost efficiency
based on relatively low economic requirements by the courts, accessibility by a majority and
comprehensive dispute settlement with all parties coming to a common point of agreement and
understanding with minimal animosity unlike the modern legal system.
The Magistrates Court Act of 1967 brought about a holistic legal system even though it has its
fair share of challenges.
The Framework of Traditional Dispute Resolution

The codified Justice System and the Traditional Dispute Justice System both have their
challenges as evidenced above the issue is the delivery of justice within the confines of the
Supreme law. Whether, the traditional dispute resolution meets the minimum threshold
accepted by the parties to the dispute is the essence of this exploration. Alternative Dispute
Resolution (ADR) Mechanism is premised on the fact that arbitrability involves a determination
of the type of disputes that can be resolved through arbitration and those which are domain of
the national courts.The recognition and applicability of arbitration as the dispute resolution
mechanism to a wide range of disputes is expected to enhance access to justice to the parties in
time. However, the scope of arbitrability is not well defined in Kenyan context and in particular
the Traditional Resolution System, it raises questions on matters that are sensitive and are of
public interest shouldn’t be strictly tried in our courts.
Nevertheless, we have seen ADR system embraced globally more particular in the diplomatic
circles. For example the United Nations (UN) has embraced ADR has a tradition method to
resolve boundary and National civil disputes before refer the matter to International Court of
Justice (ICJ). The reasons are as underscored above but mainly it is fast and its intention is to
leave rivaling parties peaceful after the dispute is resolved. In Rwanda genocide, the most
complex dispute with potential generational feuds embraced Traditional Dispute method
“Gacaca” backed with the Country’s Judicial System. Gacaca courts are a grassroots legal
mechanism adopted by the Rwandan government to respond to the legacies of the country’s
1994 genocide. National- level discussions in the 1990s determined that citizen participation in
the justice process would be critical for the manifestation of the truth about the genocide and
the creation of a conducive environment for reconciliation.4 Gacaca is modeled after a
traditional Rwandan dispute resolution mechanism to involve a large part of the population as
either judges or witnesses.
The Constitution of Kenya 2010 article 159 (2c); has entrenched informal dispute resolution in it,
“alternative forms of dispute resolution including reconciliation, mediation, arbitration and
traditional dispute resolution mechanism shall be promoted provided it does not contravene the
Bill of Rights and is repugnant to justice and morality or results in outcomes that are repugnant
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to justice or morality or inconsistent with this Constitution or any written law”. The provincial
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administration has also stepped in where the formal justice system has fallen short. Here, the
chief or sub-chief assisted by elders; acts as a negotiator, arbiter or a mediator or a cocktail of
these.
The TDR Justice system can offer a lasting dispute resolution alternative now that it has been
entrenched in the Constitution 2010. Parliament has a chance to enact statues with rules and
guidelines to ensure that it does not suffer the same fate it did after the introduction of
“Magistrate Court 1967 Act “. The Arbitration Tribunals shoot from the enhanced “Arbitration
Act”which embraces the ADR principle, so most commercial entities disputes use it as opposed
the Courts. However, the statute that govern the tribunal process is elaborate in terms of rule
that guide it and conclusive in nature unless the process is bias. The abolished traditional
dispute resolutions by enlarge lacked adequate legislation to guide the process without bias and
punish culprit who could abuse the process.
Advantages of Traditional Dispute Resolution

I. Its user friendly as revealed in the study many women especially in the rural areas resort to the
informal community justice systems for redress of violations, these informal structures are
therefore for many women the stick that is close at hand.
II. It preserves the relationship between the two conflicting parties. Every time the word “see you
in court” are uttered, we acknowledge there is a complete breakdown of the relationship. Once
in court the only outcome expected is one party will win while the other loses causing bad blood
between friends and family members. This can be avoided by use of ADR such as mediation by
council of elders.
III. When it comes to costs and expenses TDR is more favorable since it’s not expensive as litigation
tends to be.Most courts are situated at the administrative headquarters and are therefore not
easily accessible to individuals. The cost of traveling to court is prohibitive and especially when a
litigant is required to make several visits to court as matters are rarely concluded at the first
hearing. Legal fees that are money paid to court as filing fees and advocates fees contribute to
raise financial cost of litigation. The long delays, cumbersome.
IV. TDR is also flexible such that the parties themselves can agree on the rules to be followed during
the process.
V. The time used in trying to prove a case in court often place justice out of reach of many people.
VI. Taking every dispute to court burdens the justice system and dilutes the quality of justice
through time and work pressure-for those who need the system most.
I. It preserves the culture of a people.In Walter Kabetu Bacha and four others V Lands Dispute
Tribunal Kiambu West and another5, Ernest who died, transferred pieces of land to his five
sons(applicants) who were issued with title deeds for the respective titles. Sometime in 1990,
Hottensiah filed a claim to part of the land before the Land Dispute Tribunal, Kiambu West
District on behalf of the Estate of her deceased husband ( brother to the five applicants) and the
Tribunal after hearing the dispute, made an award, giving Hottensiah one acre from the land
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title. However, the award has since 1990 never been enforced, and remains in court. The crux of
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the case is that the tribunal, notwithstanding the import of first registration of extinction of the
customary claims, it upheld the customary claim of trust and rights.
II. Some of the reasons for the persistence of TJS in Africa despite the introduction of Western-
based state law systems include the incomplete reach of the state’s legal structures, due to the
weak nature of most African states. People face geographical and financial constraints in
accessing the formal justice systems
III. Many Kenyans are frustrated and dissatisfied with the court process hence the tendency to trust
alternative means of accessing justice.
The Envisaged Disadvantage of the Traditional Dispute Resolution System

I. TJS is anarchical as it is based on unwritten laws, rules and procedures. These are at best vague,
render the process open to manipulation, unpredictable, unreliable and are subject to the
whims of its leaders and can be cumbersome. Some of the laws are contrary to the constitution,
written law, fundamental principles of governance and human rights and are repugnant to
morality.Somedisputes involve such heinous offences, that traditional dispute resolution would
not offer sufficient punishment in view of the Penal Code. In R v Mohammed Abdow
Mohammed,6 the accused was charged with murder, but his family made an application with
the Director of Public Prosecution to withdraw the charge on account of a settlement reached
between the families of the accused and the deceased. The letter read in part: “The two families
have sat and some form of compensation has taken place wherein camels, goats and other
traditional ornaments were paid to the bereaved family…. Under the Islamic laws and customs
applicable in such matters, the aggrieved family does not wish to pursue the matter any further
be it in court or any other forum. ” The deceased father’s letter read: “It goes against our
tradition to pursue the matter any further or testify against the Accused person once we have
received full compensation. It is our instruction that the court case be withdrawn as our family
wishes to put a stop to the matter.”
II. They are sporadic; are not structured and vary from one community to the next. Some of the TJS
purport to preside over matters that are out of their jurisdiction like criminal offences. The
effect of this is that the formal justice system is immobilized as witnesses become complacent
and unwilling to testify in court as they may have already settled the matter. Serious offences
such as defilement are settled out of court and very lenient punishment (if at all) is given.
III. Some of the laws, rules and processes governing TJS are archaic and impracticable in modern
society. There are some punishments like flogging, banishment from the community, payment
of fines in the form of livestock which may not be possible to fulfill.
IV. Some contain systemic biases and can be discriminatory since they are based on traditional
African customs which are largely patriarchal. For instance many do not include women as
elders and in cases where one party is a woman there is a great possibility that she will be
disadvantaged.
V. They are limited in terms of their view of world affairs and may be unable to preside over some
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VI. Since IJS is not structured formally, some users are misled to believe that the hierarchy of the
system is from the village elder to the assistant chief to the chief then D.O. to the D.C. and
finally to the P.C. This distorts the notion of expeditious justice also considering that these
officers in the provincial administration may not be skilled in dispute resolution.
VII. In some incidences there are no enforcement mechanisms and compliance is predicated upon
the culprit’s conscience and socially enforced sanctions such as shunning, ridicule, ostracizing
and prejudice.
Importance of Traditional Justice System

The importance of TJS in ensuring access to justice especially for the poor, marginalized and
vulnerable cannot be gainsaid. TJS compliments the formal justice systems therefore closing the
glaring gap between the two justice systems. The approach adopted in TJS is comprehensive and
is geared towards a cohesive and harmonious community.There are arguments on either side of
the debate on whether the TJS should be legislated upon and as it were, they be formalized.
Those who are pro-formalization argue that there needs to be a standardized system, which
applies across the country with certain minimum rules. The TJS would eventually be like any
ordinary court but governed by a different set of rules. Also, some of the biases associated with
TJS and these can be eliminated by formalization and streamlining. Those who are anti-
formalization posit that TJS are fundamentally flawed and ought to be phased out. The
formalization of the TJS would radically alter their original form and alienate them from the
ordinary users thereby rendering them unavailable.
The major challenge is that information on many of these systems remains undocumented.
While some practices are similar in communities in Kenya others are contradictory.There is need
to deal with such challenges as the consideration of diversity in the communities, congruence
with human rights, application across different communities, fundamental freedoms and
equality and demarcating the types of cases to be handled by the TJS.
The Recommendations on Traditional Justice Systems

1. Awareness creation: This ought to be done among the public and the formal justice structures
on the role of the TJS.
2. Standardization: The TJS should be strengthened and streamlined by institutionalization. There

is need to put in place a system that responds to the inadequacies of the formal system while
being accessible to the poor and vulnerable. The TJS should have clear powers and jurisdiction.
3. Link between TJS and formal Courts: A nexus should be created between TJS and the formal
court processes to enhance access to justice. A referral system should be developed with the
possibility that decisions of the TJS can be enforced by the formal courts. Also, a mechanism
ought to be put in place to allow courts to refer cases to TJS for settlement where necessary.
154
There is need to develop models for collaboration between the two systems to improve the
delivery of justice, resolve disputes, and protect rights. Overall, linking the informal dispute
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community-based practices, while helping to build trust between the two systems as the formal
confers legitimacy on decisions of the non-state mechanisms.
4. Restructuring: TJS should be restructured to ensure inclusiveness and equal participation by

contending parties. The TJS should have representation from all community groups including
youth, women, men, people with disability CBO representatives and different ethnic groups
where applicable. The TJS should have a code of conduct, rules, procedures and policy
guidelines.
5. Capacity Building: There is also need to build the capacity of TJS and legitimize them so as to
make them more user-friendly and more accessible for those matters that need not be
adjudicated upon in the formal justice system. The TJS members should also be sensitized on
basic constitutional, legislative and human rights provisions.
6. Documentation: There is need to do a nationwide in-depth survey to identify existing TJS;
identify their strengths and weaknesses and make proposals on how to refine them for
mainstreaming. Also the proceedings in TJS should be recorded for future reference.
Conclusion
The recognition and applicability of ADR as the dispute resolution mechanism to a wide range of
disputes is expected to enhance access to justice to the parties in time. However, the scope of
arbitrability is not well defined in Kenyan context and in particular the Traditional Resolution System, it
raises questions on matters that are sensitive and are of public interest and shouldn’t be strictly tried in
our courts.
After looking at the history of judicial system in Kenya, we can safely say that the native tribunals were
not abolished but absorbed in to the judicial system and become the lower magistrate courts. During
colonization there existed two parallel judicial system the native tribunals and the formal courts, which
were accessible by natives and white setters respectively.
Towards the 50s the native system was very developed to a point that the magistrates couldappear from
time to time. They were so developed so much to almost represent the formal court in particular the
ability to resolve disputes invoking customs and native traditions rules as final retribution adopted by
the community. Arbitrability involves a determination of the type of disputes that can be resolved
through arbitration and those which are domain of the national courts.
Our opinion is that not all disputes that arise between parties are necessarily resolved bylitigation. The
application of Traditional Dispute Resolution mechanism to a wide range of disputes will reduce the
backlog of cases in the Kenyan Courtsand may also widen the scope of what is resolvable under the
Kenyan Legal System.
When parliament drafts a billor a comprehensive policy and legal framework to operationalize
155
traditional dispute resolution mechanism or Article 159 (2c) of the Constitution, most of the disputes
referred to court will be resolved without resort to the courts.
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If a new Traditional Dispute Resolution Law, designed to give effect to article 159(2c) of the Constitution
of Kenya, probably to be known as “Traditional Arbitration Act”, will enshrine the Traditional Justice
System as a perpetual legal system that the locals in the modern communities and away cities, will use
to access justice in time.
156
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Alternative Dispute Resolution (University of Nairobi)

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

ALTERNATIVE DISPUTE RESOLUTION

TAUGHT BY: MR.LEONARD OLOO

FROM JANUARY 13TH 2014

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

LECTURE 1: 13TH JANUARY 2014- 5.30-7.30PM (LECTURE HALL B2)

TOPIC 1: INTRODUCTION TO ADR

THE WOOLF REPORT

report and set out key objectives which were:

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

i. Parties to be encouraged to explore alternatives to a court resolution of a dispute.

yet there were provisions to use ADR.

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

was a claim for an injunction.

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

WHY THE NEED FOR ADR

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

CHARACTERISTICS OF COURT SYSTEM

ADVANTAGES OF COURT SYSTEM

2. Qualification: A legally qualified judge will decide the case.

DISADVANTAGES OF THE COURT SYSTEM

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

Republic v. Mohamed Abdow Mohamed Criminal Case 86 of 2011

Excerpt of the letter from the deceased family to the DPP:

2010 extended to criminal matters.

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

Application allowed, accused person discharged.

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ALTERNATIVE DISPUTE RESOLUTION-GPR 312

LECTURE 2 AND 3: 20TH JANUARY 2014- 5.30-7.30PM (LECTURE HALL B2)

DIFFERENCE BETWEEN THE STYLES OF NEGOTIATION

SOFT HARD PRINCIPLED

7. Make offers. 8. Mislead as to your bottom 6. Useful in prescribed or

line. 9. Demand one-sided gains

THESE NOTES HAVE BEEN COMPILED BY JOSEPH MCDONALD PHOTOCOPYING IS PROHIBITED

Downloaded by Munyaradzi Katsande I ([email protected])

ALTERNATIVE DISPUTE RESOLUTION-GPR 312